<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-82653
PROSPECTUS SUPPLEMENT
(To prospectus dated July 20, 1999)
1,450,000 SHARES
[TIFFANY & CO. LOGO]
COMMON STOCK
------------------------
We are offering all of the 1,450,000 shares of common stock offered
by this prospectus supplement.
The common stock trades on the New York Stock Exchange under the
symbol "TIF." On July 22, 1999, the last sale price of the common stock as
reported on the New York Stock Exchange was $50 7/8 per share.
INVESTING IN THE COMMON STOCK INVOLVES RISKS WHICH ARE DESCRIBED IN
THE "RISK FACTORS" SECTION BEGINNING ON PAGE 4 OF THE ACCOMPANYING PROSPECTUS.
------------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus supplement or the accompanying prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
------------------------
The underwriter has agreed to purchase from us the shares of common
stock offered hereby for a purchase price of $49.375 per share. The proceeds to
us from the sale of the shares of common stock will be $71,593,750 in the
aggregate.
The common stock offered hereby may be offered by the underwriter
from time to time in one or more transactions in the over-the-counter market or
through negotiated transactions at market prices or at negotiated prices. The
underwriter may not offer the common stock to the public through the facilities
of the New York Stock Exchange or to or through a market maker otherwise than on
such exchange.
The underwriter may also purchase up to an additional 145,000 shares
at the same price per share to be paid by the underwriter for the other shares
offered hereby within 30 days from the date of this prospectus supplement to
cover over-allotments.
------------------------
The shares of common stock will be ready for delivery in New York,
New York on or about July 28, 1999.
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MERRILL LYNCH & CO.
------------------------
The date of this prospectus supplement is July 23, 1999.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
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PAGE
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<S> <C>
Forward-Looking Statements.................................. S-2
Recent Developments......................................... S-3
Use Of Proceeds............................................. S-3
Underwriting................................................ S-4
Legal Matters............................................... S-6
</TABLE>
PROSPECTUS
<TABLE>
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PAGE
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<S> <C>
About This Prospectus....................................... 2
Where You Can Find More Information......................... 2
Incorporation Of Information We File With The SEC........... 2
The Company................................................. 4
Risk Factors................................................ 4
Use Of Proceeds............................................. 6
Ratio Of Earnings To Fixed Charges.......................... 6
Description Of Debt Securities.............................. 7
Plan Of Distribution........................................ 13
Legal Matters............................................... 14
Experts..................................................... 14
</TABLE>
FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus contain (or
incorporate by reference) certain forward-looking statements. We have based
these forward-looking statements on our current expectations and projections
about future events. These forward-looking statements are subject to risks,
uncertainties and assumptions about Tiffany & Co., including, among other
things:
- Economic conditions and consumer attitudes,
- Successful completion of leases and construction for new stores,
- Continuation of existing product supply and design license arrangements,
- Continuity in the market for high-quality cut diamonds,
- Successful integration of new systems, particularly for inventory
management, into our operations, and improvement of warehousing and
distribution productivity,
- Stable exchange rates between the Japanese yen and the U.S. dollar and
- Timely completion of our year 2000 compliance program.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events contained or incorporated by reference in this prospectus supplement and
the accompanying prospectus might not occur.
------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not, and the underwriter has not, authorized any other person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriter is not, making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus supplement and the accompanying prospectus, as well
as information we previously filed with the SEC and incorporated by reference,
is accurate as of its date only. Our business, financial condition, results of
operations and prospects may have changed since that date.
S-2
<PAGE> 3
RECENT DEVELOPMENTS
TRANSACTION WITH ABER RESOURCES LTD.
On July 19, 1999, we entered into a joint venture with Aber Resources Ltd.
through which we expect to secure a considerable portion of our future diamond
needs. We expect this joint venture to supply diamonds to us under the terms of
a diamond supply agreement. Vancouver-based Aber holds a 40 percent interest in
the Diavik Diamonds Project, an operation being developed to mine
diamond-bearing ore deposits in Canada's Northwest Territories. Mining cannot
commence until the Canadian government issues all necessary approvals and the
project operator, Diavik Diamond Mines Inc., agrees to go forward with the
project. Diavik Diamond Mines Inc., a subsidiary of Rio Tinto plc and a company
independent from Aber, holds a 60 percent interest in the project. Production is
expected to commence in 2002.
On the same date, we purchased 8,000,000 shares of Aber's common stock for
approximately $72 million. These shares represent approximately 14.9 percent of
Aber's issued and outstanding shares, after giving effect to our investment.
Aber's common stock is traded on both The Toronto Stock Exchange and the Nasdaq
National Market. In connection with this investment, Aber has agreed to nominate
one member of Tiffany's management to Aber's Board of Directors. We used cash on
hand for this investment.
TWO-FOR-ONE STOCK SPLIT
On May 20, 1999, our Board of Directors declared a two-for-one stock split
in the form of a stock dividend. This stock dividend was paid on July 21, 1999
to stockholders of record on June 23, 1999. As a result, each record holder on
June 23, 1999 received one share of common stock for each share held, thereby
doubling the number of our issued and outstanding shares of common stock.
As a result of the stock split, certain share and per share data
incorporated by reference in this prospectus supplement from our Annual Report
on Form 10-K for the year ended January 31, 1999 are superseded as follows:
<TABLE>
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FISCAL YEARS ENDED JANUARY 31,
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1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EARNINGS DATA:
Net earnings per share:
Basic..................................... $ 0.47 $ 0.62 $ 0.87 $ 1.04 $ 1.29
Diluted................................... $ 0.47 $ 0.61 $ 0.83 $ 1.01 $ 1.25
Weighted average number of common shares
(in thousands):
Basic..................................... 63,592 63,200 67,364 69,906 69,930
Diluted................................... 67,164 68,040 71,380 72,208 71,968
BALANCE SHEET AND CASH FLOW DATA:
Stockholders' equity per share.............. $ 3.53 $ 4.14 $ 5.48 $ 6.35 $ 7.44
Cash dividends per share.................... $ 0.07 $ 0.07 $ 0.09 $ 0.13 $ 0.17
</TABLE>
USE OF PROCEEDS
Our net proceeds from the sale of the common stock offered by this
prospectus supplement are expected to be $71.4 million, after deducting
estimated offering expenses (approximately $78.6 million if the underwriter's
over-allotment option is exercised).
Having just used approximately $72 million of cash on hand for our
investment in Aber, we intend to use the net proceeds from this offering for
working capital and general corporate purposes. Until we use the net proceeds of
the offering, we will invest the funds in short-term interest-bearing
securities.
S-3
<PAGE> 4
UNDERWRITING
GENERAL
Subject to the terms and conditions set forth in a purchase agreement
between us and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
underwriter, we have agreed to sell to Merrill Lynch, and Merrill Lynch has
agreed to purchase from us, the shares of common stock offered hereby. The
purchase agreement provides that the obligations of Merrill Lynch are subject to
certain conditions and that when these conditions are satisfied Merrill Lynch
will be obligated to purchase all of the shares of common stock offered in this
offering.
Merrill Lynch has advised us that it proposes to offer the shares of common
stock from time to time for sale in one or more transactions in the
over-the-counter market, through negotiated transactions or otherwise at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. Merrill Lynch may not offer the common
stock to the public through the facilities of the New York Stock Exchange or to
or through a market maker otherwise than on such exchange. In connection with
the sale of any shares of common stock hereby, Merrill Lynch may be deemed to
have received compensation from us equal to the difference between the amount
received by Merrill Lynch upon the sale of such common stock and the price at
which Merrill Lynch purchased such common stock from us. In addition, if Merrill
Lynch sells common stock to or through certain dealers, such dealers may receive
compensation in the form of underwriting discounts, concessions or commissions
from Merrill Lynch and/or any purchasers of common stock for whom they may act
as agent. Merrill Lynch may also receive compensation from the purchasers of
common stock for whom it may act as agent.
We have granted an option to Merrill Lynch, exercisable for 30 days after
the date of this prospectus supplement, to purchase up to an aggregate of
145,000 additional shares of common stock at the same price per share to be paid
by Merrill Lynch for the other shares offered hereby. Merrill Lynch may exercise
its option solely to cover over-allotments, if any, made on the sale of the
common stock offered in this prospectus supplement. If the option is exercised
in full, the aggregate proceeds to us before expenses will be $78,753,125.
The expenses of the offering are estimated at $200,000 and are payable by
us.
The shares of common stock are being offered by Merrill Lynch, subject to
prior sale, when, as and if issued to and accepted by Merrill Lynch, subject to
approval of certain legal matters by counsel for Merrill Lynch and certain other
conditions. Merrill Lynch reserves the right to withdraw, cancel or modify such
offer and to reject orders in whole or in part.
We have agreed to indemnify Merrill Lynch against certain liabilities,
including certain liabilities under the Securities Act, or to contribute to
payments Merrill Lynch may be required to make for those liabilities.
PRICE STABILIZATION AND SHORT POSITIONS
Until the distribution of the common stock is completed, rules of the
Securities and Exchange Commission may limit the ability of Merrill Lynch to bid
for and purchase the common stock. As an exception to these rules, Merrill Lynch
is permitted to engage in certain transactions that stabilize the price of the
common stock. The transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the common stock.
S-4
<PAGE> 5
Merrill Lynch may create a short position in the common stock in connection
with the offering. This means that if Merrill Lynch sells more shares of common
stock than are set forth on the cover page of this prospectus supplement, it may
reduce that short position by purchasing common stock in the open market.
Merrill Lynch may also elect to reduce any short position by exercising all or
part of the over-allotment option described above.
PENALTY BIDS
Merrill Lynch may also impose a penalty bid on certain selling group
members. This means that if Merrill Lynch purchases shares of common stock in
the open market to reduce its short position or to stabilize the price of the
common stock, it may reclaim the amount of the selling concession from selling
group members who sold those shares.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of the common stock to the extent that it
discourages resales of the common stock.
Neither we nor Merrill Lynch makes any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the common stock. In addition, neither we nor Merrill
Lynch makes any representation that Merrill Lynch will engage in such
transactions or that such transactions, once commenced, will not be discontinued
without notice.
OTHER RELATIONSHIPS
Merrill Lynch has, from time to time, provided us with investment banking
and other financial services.
S-5
<PAGE> 6
LEGAL MATTERS
Certain legal matters with respect to the validity of the common stock
offered hereby will be passed upon for Tiffany & Co. by Gibson, Dunn & Crutcher
LLP, New York, New York. Charles K. Marquis, one of our directors, was a partner
of Gibson, Dunn & Crutcher LLP during 1998. Certain legal matters relating to
this offering will be passed upon for the underwriter by Shearman & Sterling,
New York, New York.
S-6
<PAGE> 7
TIFFANY & CO.
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$125,000,000
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COMMON STOCK
DEBT SECURITIES
By this prospectus, we may from time to time offer shares of common stock
or debt securities. We will provide specific terms of the offering of these
securities in supplements to this prospectus. You should read this prospectus
and any supplement carefully before you invest.
------------------------
SEE "RISK FACTORS" ON PAGE 4 OF THIS PROSPECTUS AND THOSE RISK FACTORS
CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT, IF ANY, FOR INFORMATION YOU
SHOULD CONSIDER BEFORE BUYING THE SECURITIES.
------------------------
This prospectus may not be used to offer and sell securities unless
accompanied by a prospectus supplement.
------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is July 20, 1999.
<PAGE> 8
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the SEC
using a "shelf" registration process. Under this shelf process, we may sell any
combination of securities described in this prospectus in one or more offerings
up to a total dollar amount of $125,000,000.
This prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read this prospectus and the applicable
prospectus supplement together with the additional information described under
the heading "Where You Can Find More Information."
The registration statement that contains this prospectus, including the
exhibits to the registration statement, contains additional information about us
and the securities we may offer under this prospectus. You can read that
registration statement at the SEC's web site or at the SEC's offices mentioned
under the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the Securities
and Exchange Commission. Our SEC filings are also available over the Internet at
the SEC's web site at http://www.sec.gov. You may also read and copy any
document we file at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
more information on the public reference rooms and their copy charges. You may
also inspect our SEC reports and other information at the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
We have filed a registration statement on Form S-3 with the SEC covering
the common stock and debt securities. For further information on Tiffany & Co.
and the securities we are offering in this prospectus, you should refer to our
registration statement, its exhibits and the documents incorporated by reference
therein. This prospectus summarizes material provisions of contracts and other
documents that we refer you to. Since the prospectus and the accompanying
prospectus supplement may not contain all the information that you may find
important, you should review the full text of those documents.
You should rely only on the information contained or incorporated by
reference in this prospectus and the accompanying prospectus supplement. We have
not authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. We are not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus or in the accompanying prospectus
supplement, as well as information we previously filed with the SEC and
incorporated by reference, is accurate only as of the date on the front cover of
this prospectus or the accompanying prospectus supplement. Our business,
financial condition, results of operations and prospects may have changed since
those dates.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means:
- incorporated documents are considered part of the prospectus,
- we can disclose important information to you by referring you to those
documents and
- information that we file with the SEC will automatically update and
supersede this prospectus.
2
<PAGE> 9
We incorporate by reference the documents listed below which we filed with
the SEC under the Securities Exchange Act of 1934 (the "Exchange Act"):
- our Annual Report on Form 10-K for the fiscal year ended January 31,
1999,
- our Quarterly Report on Form 10-Q for the quarter ended April 30, 1999,
- our Current Reports on Form 8-K filed March 4, 1999 and May 21, 1999,
- our definitive Proxy Statement filed with the SEC on April 8, 1999 for
our Annual Meeting of Stockholders held on May 20, 1999 and
- the description of our common stock contained in the Registration
Statement filed with the SEC on Form S-1 (Registration No. 33-12818), as
most recently amended in the prospectus for the our common stock dated
May 5, 1987, as supplemented by the Registration Statement dated November
18, 1988, filed with the SEC on Form 8-A, as most recently amended by
Form 8-A/A dated September 24, 1998 and filed on September 25, 1998.
We also incorporate by reference each of the following documents that we
will file with the SEC (1) after the date of the filing of the registration
statement of which this prospectus forms a part and prior to its effectiveness
and (2) until all the securities offered by this prospectus have been sold:
- reports filed under Sections 13(a) and (c) of the Exchange Act,
- definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meeting and
- any reports filed under Section 15(d) of the Exchange Act.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address:
Tiffany & Co.
Attention: Investor Relations Department
727 Fifth Avenue
New York, New York 10022
Phone: (212) 605-4016
3
<PAGE> 10
THE COMPANY
We are the renowned jeweler and specialty retailer whose products are
distinguished by their design, quality and value. Tiffany's principal products
are fine jewelry, timepieces, sterling silver goods, china, crystal, stationery,
writing instruments, fragrances and personal accessories sold under the TIFFANY
& CO. trademark. From our roots at a single New York City store, we have
expanded to locations in the Americas, Asia and Europe. Our products are now
sold in more than 100 TIFFANY & CO. stores and boutiques, as well as through
other fine jewelers and select department stores, and through direct marketing
to catalog and business customers.
We pursue long-term growth through our strategies for expansion,
merchandising, marketing and customer service -- always focused on our goal of
being the world's most respected jewelry retailer.
RISK FACTORS
You should carefully consider the following risk factors as well as the
other information included and incorporated by reference in this prospectus and
the accompanying prospectus supplement before deciding to invest in our common
stock or debt securities, as the case may be.
AS WE DEPEND ON THE JAPANESE MARKET FOR A SIGNIFICANT PORTION OF OUR OPERATING
EARNINGS, A DOWNTURN IN THE JAPANESE MARKET COULD ADVERSELY AFFECT OUR BUSINESS.
We derive a significant share of operating earnings from our operations in
Japan. That share is larger than Japan's percentage of our total net sales.
Total Japan sales represented approximately 27% of our net sales in each of our
fiscal years ended January 31, 1997, 1998 and 1999. Therefore, a substantial
decline in Japan sales would likely have a significant adverse effect on our
earnings. Also, our ability to meet sales and earnings estimates for any single
fiscal year is based upon the assumption that there will not be a substantial
adverse change in the exchange relationship between the Japanese yen and the
U.S. dollar throughout the fiscal year.
Our commercial relationship with Mitsukoshi, Ltd. and Mitsukoshi's ability
to continue as a leading department store operator have been and will continue
to be substantial factors in our continued success in Japan. TIFFANY & CO.
boutiques are located in 30 Mitsukoshi department stores and other retail
locations operated by Mitsukoshi in Japan. We also operate 13 boutiques in
department stores other than Mitsukoshi, in locations within Japan but outside
of Tokyo, and plan to open more.
In recent years, the Japanese department store industry has, in general,
suffered declining sales. There is a risk that these financial difficulties will
force consolidations or store closings. Should one or more Japanese department
store operators, such as Mitsukoshi, elect or be required to close one or more
stores now housing a TIFFANY & CO. boutique, our sales and earnings would be
reduced while alternate premises are being secured.
IF CONSUMERS REDUCE THEIR DISCRETIONARY PURCHASES OF LUXURY GOODS AS A RESULT OF
ECONOMIC CONDITIONS OR OTHERWISE, OUR BUSINESS COULD BE ADVERSELY AFFECTED.
As is the case with any retailer, wholesaler or direct marketer of consumer
goods, our financial success is partially dependent on economic conditions and
consumer attitudes. TIFFANY & CO. products are, or are widely perceived to be,
"luxury" goods. Therefore, purchases of TIFFANY & CO. products are often
discretionary. Low or negative growth in the economy or in the financial markets
could reduce discretionary spending and, accordingly, reduce our sales.
WE ARE DEPENDENT ON TWO LICENSE AGREEMENTS FOR THE DESIGN OF A SIGNIFICANT
PORTION OF OUR JEWELRY. IF EITHER OR BOTH OF THESE AGREEMENTS WERE TO BE
TERMINATED BY THE LICENSORS, OUR BUSINESS COULD BE ADVERSELY AFFECTED.
We have been the sole licensee for jewelry designed by Elsa Peretti since
1974 and by Paloma Picasso since 1980. In the fiscal year ended January 31,
1999, Ms. Peretti's designs represented approximately 15% of our total net
sales, and sales of Ms. Picasso's designs represented approximately 3%
4
<PAGE> 11
of our total net sales. Ms. Peretti and Ms. Picasso each retain ownership of
their respective trademarks and of the copyrights for their respective designs.
Written license agreements exist between Ms. Peretti and Tiffany and between Ms.
Picasso and Tiffany, but those agreements may be terminated by either party
following six months' notice to the other party. Our operating results could be
adversely affected if either license agreement were terminated or substantially
changed.
THE SUPPLY AND PRICE OF ROUGH DIAMONDS ARE SIGNIFICANTLY INFLUENCED BY A SINGLE
ENTITY, OVER WHICH WE EXERT NO CONTROL. IN ADDITION, WE RELY UPON THREE KEY
VENDORS FOR THE SUPPLY OF OUR CUT DIAMONDS.
Diamond jewelry accounts for approximately 21% of our net sales. The supply
and price of rough (uncut and unpolished) diamonds in the principal world
markets have been and continue to be significantly influenced by a single
entity, the Central Selling Organization of De Beers Centenary AG, a Swiss
corporation. The Central Selling Organization supplies approximately 70% of the
world market for rough, gem-quality diamonds. Through affiliates, the Central
Selling Organization continues to exert a significant influence on the demand
for polished diamonds by its advertising and marketing efforts throughout the
world.
The availability and price of diamonds to the Central Selling Organization
and our suppliers may be, to some extent, dependent on the political situation
in diamond-producing countries, the opening of new mines and the continuance of
the prevailing supply and marketing arrangements for rough diamonds. Our
operations may be adversely affected by sustained interruption in the supply of
rough diamonds, an over-abundance of supply or a substantial change in the
marketing arrangements described above.
The Central Selling Organization is testing a program to authenticate and
"brand" cut and polished diamonds with the Central Selling Organization's
proprietary trademark. Such a program, coupled with a change in the marketing
and advertising policies of the Central Selling Organization's affiliates, could
affect consumer demand for diamonds that do not bear the Central Selling
Organization's trademark. We may or may not carry Central Selling
Organization-branded diamonds in the future.
We purchase cut diamonds principally from three key vendors. Were our trade
relations with one or more of these vendors to be disrupted, our sales would be
adversely affected in the short term until alternative supply arrangements could
be established.
WE ARE SUBJECT TO INTENSE COMPETITION, PARTICULARLY OUTSIDE THE UNITED STATES
AND JAPAN.
We encounter significant competition in all of our product lines from other
third-party providers, some of which specialize in just one area in which we are
active. Many of our competitors have established reputations for style and
expertise similar to ours and compete on the basis of value. Other jewelers and
retailers compete primarily through advertised price promotion. We compete on
the basis of quality and value and do not engage in price promotional
advertising.
The international marketplace for our products is highly competitive.
Although we believe that TIFFANY & CO. is known internationally, and although
Tiffany did operate retail stores in London and Paris prior to World War II, we
did not have a retail presence in Europe in the post-war era until 1986.
Accordingly, consumer awareness of Tiffany and our products is not as strong in
Europe as in the United States or in Japan, where Tiffany has distributed its
products for many years. We expect that our overseas stores will continue to
experience intense competition from established retailers in international
cities where TIFFANY & CO. stores are or may eventually be located.
We also face increasing competition in the area of direct marketing. A
growing number of direct sellers compete for access to the same mailing lists of
known purchasers of luxury goods. In marketing service awards and business gifts
to corporations and other organizations, we face numerous competitors who sell a
wide variety of products at a greater price range than we sell, as we have
chosen to offer a more limited selection in order to adhere to our established
quality standards.
5
<PAGE> 12
OUR RESULTS OF OPERATIONS ARE DEPENDENT ON OUR ABILITY TO SUCCESSFULLY IMPLEMENT
OUR RETAIL
EXPANSION PROGRAM.
Our ability to continue our scheduled worldwide retail expansion program is
dependent upon our ability to obtain desirable locations on suitable lease terms
and complete construction on a timely basis. In addition, the timing and success
of expansion outside the United States will depend upon import taxes and duties
and the extent of consumer demand for TIFFANY & CO. products in overseas
markets. These factors vary from market to market.
WE MUST CONTINUE TO UPDATE AND INTEGRATE OUR INVENTORY MANAGEMENT AND
DISTRIBUTION SYSTEMS IN ORDER TO KEEP PACE WITH OUR GROWTH.
As we have grown, so have the demands placed on our distribution and
inventory management systems. Our ability to sustain growth in sales and
profitability is dependent upon our ability to successfully develop and
integrate new systems, particularly for inventory management, into our
operations and to further improve warehousing and distribution productivity.
AS OUR BUSINESS IS VERY SEASONAL, WE RELY ON A STRONG FOURTH QUARTER EACH YEAR.
Our business is seasonal in nature, with the fourth quarter typically
representing a proportionally greater percentage of annual sales, earnings from
operations and cash flow. A downturn in economic conditions or consumer spending
on luxury goods in the fourth quarter of any year would adversely affect our
sales and earnings.
USE OF PROCEEDS
Unless otherwise described in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of the securities offered by this
prospectus for general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED JANUARY 31, APRIL 30,
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1995 1996 1997 1998 1999 1998 1999
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<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges.................. 3.39x 4.20x 6.21x 7.88x 8.03x 4.87x 5.00x
</TABLE>
We have computed these ratios by dividing earnings available for fixed
charges for each period by fixed charges for that period. For purposes of these
computations, we calculated "earnings" by adding our pre-tax income and our
fixed charges. We calculated "fixed charges" by adding the interest we pay on
our indebtedness, the amount we amortize for debt financing costs and our
estimate of the amount of the interest element within our rental expense, which
was assumed to be equal to one-third of our rental expense.
6
<PAGE> 13
DESCRIPTION OF DEBT SECURITIES
The following description is a summary of certain of the material
provisions of the Indenture (as defined below) and the Debt Securities. This
description does not restate the Indenture or the terms of the Debt Securities
in their entirety. We urge you to read the Indenture because it, and not this
description, will define your rights as a holder of the Debt Securities. The
form of the Indenture is filed as an exhibit to the Registration Statement of
which this prospectus is a part.
The following description relates generally to every series of Debt
Securities. The particular terms of any series of Debt Securities will be
described in the applicable prospectus supplement. If so indicated in the
applicable prospectus supplement, the terms of any such series may differ from
the terms set forth below.
GENERAL
Any series of Debt Securities will be issued under an Indenture (the
"Indenture"), dated as of , between Tiffany & Co. and
, as trustee (the "Trustee").
The Indenture does not limit the aggregate principal amount of all Debt
Securities or of any particular series of Debt Securities that may be issued
thereunder. The Indenture provides that Debt Securities may be issued from time
to time in one or more series, in each case with the same or various maturities,
at par or at a discount. The Indenture does not limit the amount of other debt
that we may issue and does not contain financial or similar restrictive
covenants. The Debt Securities will be direct, unsecured obligations of Tiffany
& Co.
We expect from time to time to incur additional indebtedness. The Indenture
does not prohibit or limit our incurrence of additional indebtedness. The
Indenture provides that there may be more than one Trustee under the Indenture
with respect to different series of Debt Securities.
The Indenture does not contain any provision intended to provide protection
to holders of Debt Securities against a sudden or dramatic decline in our credit
quality that could, for example, result from a takeover, recapitalization,
special dividend or other restructuring.
The applicable prospectus supplement will describe the following terms of
the series of Debt Securities in respect of which this prospectus is being
delivered:
- the title of such Debt Securities and whether they will be senior
securities or subordinated securities;
- any limit upon the aggregate principal amount of such Debt Securities and
the percentage of such principal amount at which such Debt Securities may
be issued;
- the date or dates on which the principal of such Debt Securities is
scheduled to become payable;
- the rate or rates, which may be fixed or variable, at which such Debt
Securities will bear interest, if any, or the formula by which interest
will be calculated, the date or dates from which interest will accrue,
the dates on which any such interest will be payable and the regular
record date for the interest payable on any interest payment date;
- if other than The City of New York, the place or places where the
principal of and premium, if any, and interest on Debt Securities will be
payable, any Debt Securities may be surrendered for registration of
transfer or for exchange and notices and demands in respect of the Debt
Securities may be served;
- the price or prices at which, the period or periods within which and the
terms and conditions upon which the Debt Securities may be redeemed, in
whole or in part, at our option;
- our obligation, if any, to redeem, purchase or repay Debt Securities
pursuant to any sinking fund or analogous provision or at the option of
the holder and the price or prices at which, the period or
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periods within which and the other terms and conditions on which the Debt
Securities shall be redeemed, purchased or repaid, in whole or in part;
- whether the Debt Securities are to be issued as fully registered
securities, bearer securities or both, and with or without coupons or
both;
- whether the Debt Securities will be issued in whole or in part in the
form of a Global Security and, in that case, the Depositary (if other
than the Depository Trust Company) for such Global Security;
- any additional covenants applicable to the Debt Securities;
- the denominations in which registered Debt Securities of the series shall
be issuable, if other than denominations of $1,000 and any integral
multiple thereof, and the denominations in which bearer Debt Securities
of such series, if any, shall be issuable if other than the denomination
of $5,000;
- if other than the principal amount thereof, the portion of the principal
amount of such Debt Securities that will be payable upon declaration of
acceleration of the maturity thereof;
- the currency or currency unit of payment of principal of and premium, if
any, and interest on such Debt Securities, and any index used to
determine the amount of principal of and premium, if any, and interest on
such Debt Securities;
- if other than as set forth in the applicable Indenture, any event of
default with respect to the Debt Securities;
- the form of the Debt Securities;
- whether the Debt Securities will be convertible into or exchangeable for
any other securities and the applicable terms and conditions of
conversion or exchange;
- if other than the Trustee, the persons who will be the security registrar
and the paying agent for the Debt Securities and the place or places
where the security register for the Debt Securities will be maintained;
- if warrants for the Debt Securities are to be issued, the form of such
warrants, the circumstances under and the manner in which the warrants
may be exercised, and any other term or condition regarding the warrants;
and
- any other terms of such Debt Securities.
PAYMENT
Unless otherwise indicated in the applicable prospectus supplement,
principal of, and any premium and interest, if any, on Debt Securities will be
payable, and Debt Securities may be presented for registration of transfer, at
our agency or office maintained for such purpose in the Borough of Manhattan,
The City of New York.
FORM, REGISTRATION AND TRANSFER
The Indenture provides that Debt Securities may be issued in fully
registered form or as bearer securities with coupons attached. Unless otherwise
indicated in the applicable prospectus supplement, Debt Securities will be
issued only in fully registered form, without coupons, in denominations of
$1,000 and any integral multiple of $1,000. The Indenture provides that Debt
Securities of any series may be issuable in permanent global form. No service
charge will be made for any registration of transfer or exchange of the Debt
Securities, but we may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection with any registration of
transfer or exchange.
The Debt Securities may be issued as Original Issue Discount Securities to
be offered and sold at a substantial discount below their stated principal
amount. Federal income tax consequences and other
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special considerations applicable to any such Original Issue Discount Securities
will be described in the applicable prospectus supplement. "Original Issue
Discount Security" means any Debt Security that provides for an amount less than
its principal amount to be due and payable upon the declaration of acceleration
of the maturity of the Debt Security in accordance with the terms of the
Indenture.
The applicable prospectus supplement relating to any series of Debt
Securities that are Original Issue Discount Securities will describe the
particular provisions relating to acceleration of the maturity of a portion of
the principal amount of such series of Original Issue Discount Securities upon
the occurrence of an Event of Default.
COVENANTS
In the Indenture, we have agreed:
(1) to duly and punctually pay the principal of and any premium and
interest on the Debt Securities of each series;
(2) to maintain an office where Debt Securities may be presented for
payment, for registration of transfer and for exchange, and where notices
and demands may be served;
(3) to preserve our corporate existence, rights and franchises,
unless, in our good faith judgment, the failure to keep in full force and
effect such corporate existence, rights or franchises could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect;
(4) to pay all taxes, assessments, governmental charges or levies
imposed on us or any of our properties, assets, income or franchises that
have or might become a Lien on our properties or assets if unpaid, other
than taxes, assessments, governmental charges or levies being contested in
good faith and in appropriate proceedings for which we have established
adequate reserves or which, if unpaid, would not reasonably be expected to
have a material adverse effect;
(5) to maintain and keep our property in good repair, working order
and condition, unless we have concluded that discontinuing such maintenance
would not reasonably be expected to have a material adverse effect; and
(6) to maintain proper books of records and accounts in accordance
with normal business practice.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture provides that neither we nor any of our subsidiaries may
consolidate with or merge into any other person or convey, transfer or lease its
respective properties and assets (determined on a consolidated basis)
substantially as an entirety to any person unless:
(1) (a) we or one of our subsidiaries is the surviving corporation or
(b) the person formed by such consolidation or into which we or one of our
subsidiaries is merged or the person which acquires our properties and
assets is a person organized and existing under the laws of the United
States, any State thereof or the District of Columbia and such person
expressly assumes, by a supplemental indenture, the payment of the
principal of and any premium and interest on the Debt Securities and the
performance of our other covenants under the Indenture;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time or both, would
become an Event of Default, has happened and is continuing; and
(3) we deliver to the Trustee Officers' Certificates and Opinions of
Counsel.
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DEFAULTS
An "Event of Default" is defined in the Indenture, with respect to Debt
Securities of any series issued thereunder, as:
(1) we default in the payment of any installment of interest upon any
of the Debt Securities of that series when due, and continuance of that
default for a period of 30 days;
(2) we default in the payment of principal of or any premium on any
Debt Security of that series when due at maturity, upon redemption, by
declaration or otherwise;
(3) we default in the payment of any sinking fund installment or
analogous obligation when due in respect of Debt Securities of that series;
(4) we or any of our subsidiaries default (a) in the payment of any
principal of or premium or interest on any other indebtedness, or the
obligation to repurchase or acquire any other indebtedness, that is
outstanding in an aggregate principal amount of at least $ million
beyond any period of grace provided with respect thereto or (b) in the
performance of or compliance with any term of any evidence of any of our
other indebtedness in an aggregate outstanding principal amount at least
$ million or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such default
or condition such other indebtedness has become, or has been declared (or
one or more persons are entitled to declare such indebtedness to be), due
and payable before its stated maturity or before its regularly scheduled
dates of payment;
(5) a final judgment or order for the payment of money in excess of
$ million shall be entered against us or any of our subsidiaries and
such judgment or order is not discharged or stayed within 60 days after
entry of such judgment or order;
(6) we fail to observe or perform any other of our covenants or
agreements in the Debt Securities of that series or the Indenture and
continuance of such failure for a period of 30 days after the date on which
written notice of such failure has been given by the Trustee or the holders
of at least 25% in aggregate principal amount of the outstanding Debt
Securities of that series; and
(7) certain events of bankruptcy, insolvency or reorganization of
Tiffany or any of our subsidiaries shall have occurred.
The Indenture provides that, if any Event of Default with respect to Debt
Securities of any series at the time outstanding occurs and is continuing,
either the Trustee or the holders of at least 25% in aggregate principal amount
of the outstanding Debt Securities of that series may declare the principal
amount (or, if the Debt Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all Debt Securities of that series to be due and
payable immediately. Upon certain conditions, such declaration may be annulled
and past defaults (except a default in payment of principal of or any premium or
interest on the Debt Securities of that series) may be waived by the holders of
a majority in principal amount of the outstanding Debt Securities of that series
on behalf of the holders of all Debt Securities of that series. In the event of
the bankruptcy, insolvency or reorganization of Tiffany or any of our
subsidiaries, the claims of holders of the Debt Securities would be subject to
the broad equity power of a United States Bankruptcy Court and to the
determination by that court of the nature of the rights of such holders.
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee upon the occurrence and continuation of an Event of Default
to act with the required standard of care, to be indemnified by the holders of
any series of outstanding Debt Securities thereunder before proceeding to
exercise any right or power under the Indenture at the request of the holders of
such series of Debt Securities. The Indenture provides that the holders of a
majority in aggregate principal amount of outstanding Debt Securities of any
series may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or other power
conferred on the Trustee, with respect to the Debt Securities of that series.
The Trustee may decline to act if such direction is contrary to law or the
Indenture or would involve the Trustee in personal liability.
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Each year, we will file with the Trustee a certificate as to compliance
with all conditions and covenants in the Indenture.
DEFEASANCE AND DISCHARGE
The terms of any series of Debt Securities may provide that we may
terminate certain of our obligations under the Indenture with respect such
series of Debt Securities by:
(1) depositing irrevocably with the Trustee for such series as trust
funds in trust:
(a) in the case of Debt Securities denominated in a foreign
currency, money in such foreign currency or Foreign Government
Obligations of the foreign government or governments issuing such
foreign currency,
(b) in the case of Debt Securities denominated in U.S. dollars,
U.S. dollars or U.S. Government Obligations, or
(c) a combination of money and U.S. Government Obligations or
Foreign Government Obligations, as applicable,
in each case in an amount that through the payment of principal,
premium, if any, or interest in respect thereof in accordance with their
terms will provide without reinvestment, not later than one business day
before the due date of any payment, sufficient money to pay the
principal of, premium, if any, and interest on the Debt Securities of
such series as they are due; and
(2) no Event of Default or event that, with notice or lapse of time or
both would become an Event of Default with respect to the Debt Securities
of that series, shall have occurred and be continuing;
(3) we have paid all other amounts payable with respect to the Debt
Securities of that series;
(4) such deposit will not result in a breach or violation of the
Indenture or any other agreement or instrument to which we are a party; and
(5) we shall have delivered an opinion of independent counsel that the
holders of the Debt Securities of that series will have no federal income
tax consequences as a result of such deposit and termination.
Such termination will not relieve us of our obligation to pay when due the
principal of, any premium and interest on the Debt Securities of such series if
the Debt Securities of such series are not paid from the money, Foreign
Government Obligations or U.S. Government Obligations held by the Trustee.
"U.S. Government Obligations" means securities that are direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged or obligations of a person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, that, in either case, are not
callable or redeemable at the option of the issuer thereof. "Foreign Government
Obligations" means securities denominated in a foreign currency that are direct
obligations of a foreign government for the payment of which its full faith and
credit is pledged or obligations of a person controlled or supervised by and
acting as an agency or instrumentality of a foreign government the payment of
which is unconditionally guaranteed as a full faith and credit obligation by
such foreign government, that, in either case, are not callable or redeemable at
the option of the issuer thereof.
The applicable prospectus supplement will state whether any defeasance
provisions of the Indenture will apply to the Debt Securities offered thereby.
MODIFICATION AND WAIVER
Certain modifications and amendments of the Indenture may be made by
Tiffany and the Trustee only with the consent of the holders of not less than a
majority in aggregate principal amount of the
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outstanding Debt Securities of each series issued under the Indenture and
affected by the modification or amendment. No modification or amendment, without
the consent of the holder of each outstanding Debt Security issued under the
Indenture and affected thereby, may:
(1) change the stated maturity of the principal of or any premium or
any interest installment on, any such Debt Security;
(2) reduce the principal amount of any such Debt Security or any
premium or interest on any such Debt Security;
(3) reduce the amount of principal payable upon acceleration of the
maturity of any Original Issue Discount Security;
(4) change the place of payment where, or currency in which, any
principal of, or any premium or interest on, any such Debt Security is
payable;
(5) impair the right to institute suit for the enforcement of any such
payment on or after its stated maturity;
(6) reduce the percentage in principal amount of outstanding Debt
Securities of any series the consent of the holders of which is necessary
to modify or amend the Indenture or waive any default or Event of Default
thereunder; or
(7) modify the foregoing requirements or reduce the percentage of
aggregate principal amount of outstanding Debt Securities of any series
required to be held by holders seeking to waive compliance with certain
provisions of the Indenture or seeking to waive certain defaults.
The holders of not less than a majority in aggregate principal amount of
the outstanding Debt Securities of any series, on behalf of the holders of all
Debt Securities of that series, may waive, insofar as that series is concerned,
our compliance with certain provisions of the Indenture. The holders of not less
than a majority in aggregate principal amount of the outstanding Debt Securities
of any series may on behalf of the holders of all Debt Securities of that series
waive any past default under the Indenture with respect to that series, except a
default in the payment of the principal of, or any premium or interest on, any
Debt Security of that series or in respect of a covenant or provision that under
the Indenture cannot be modified or amended without the consent of the holder of
each outstanding Debt Security issued thereunder of the series affected.
We and the Trustee may make other modifications and amendments to the
Indenture without the consent of holders of the outstanding Debt Securities.
The Indenture provides that in determining whether the holders of the
requisite principal amount of the outstanding Debt Securities issued under such
Indenture have given any request, demand, authorization, direction, notice,
consent or waiver thereunder or are present at a meeting of holders of Debt
Securities for quorum purposes:
(1) the principal amount of an Original Issue Discount Security that
will be deemed to be outstanding will be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon acceleration of the maturity thereof, and
(2) the principal amount of a Debt Security denominated in a foreign
currency or currency unit will be the U.S. dollar equivalent, determined on
the date of original issuance of such Debt Security, of the principal
amount of such Debt Security or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent, determined on the date of original
issuance of such Debt Security, of the amount determined as provided in (1)
above.
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TITLE
Tiffany, the Trustee and any agent of Tiffany or the Trustee may treat the
registered owner of any Debt Security as the absolute owner thereof, whether or
not such Debt Security is overdue and notwithstanding any notice to the
contrary, for the purpose of making payment and for all other purposes.
REPLACEMENT OF DEBT SECURITIES
Any mutilated Debt Security will be replaced by us at the expense of the
holder upon surrender of such Debt Security to the Trustee. Debt Securities that
are destroyed, lost or stolen will be replaced by us at the expense of the
holder upon delivery to the Trustee of satisfactory evidence of the destruction,
loss or theft thereof. In the case of a destroyed, lost or stolen Debt Security,
an indemnity satisfactory to the Trustee and us may be required at the expense
of the holder of such Debt Security before issuance of a replacement Debt
Security.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
CONCERNING THE TRUSTEE
Any Trustee may resign or be removed with respect to one or more series of
Debt Securities and a successor Trustee may be appointed to act with respect to
such series. If two or more persons are acting as Trustee with respect to
different series of Debt Securities, each such Trustee will be a Trustee of a
trust under the Indenture separate and apart from the trust administered by any
other such Trustee. Any action described herein to be taken by the Trustee in
that circumstance may be taken by each such Trustee with respect to, and only
with respect to, the one or more series of Debt Securities for which it is
Trustee.
PLAN OF DISTRIBUTION
We may sell the securities being offered by this prospectus separately or
together:
- through agents;
- to or through underwriters;
- through dealers;
- through a block trade in which the broker or dealer engaged to handle the
block trade will attempt to sell the securities as agent, but may
position and resell a portion of the block as principal to facilitate the
transaction;
- directly to purchasers, through a specific bidding, auction or other
process; or
- through a combination of any of these methods of sale.
We may effect the distribution of the securities from time to time in one
or more transactions at a fixed price or prices, which may be changed from time
to time:
- at market prices prevailing at the times of sale;
- at prices related to such prevailing market prices; or
- at negotiated prices.
We will describe the method of distribution of the securities in the
prospectus supplement.
Agents designated by us from time to time may solicit offers to purchase
the securities. We will name any agent involved in the offer or sale of the
securities and set forth any commissions payable by us to an agent in the
prospectus supplement. Unless otherwise indicated in the prospectus supplement,
any agent
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will be acting on a best efforts basis for the period of its appointment. Any
agent may be deemed to be an "underwriter" of the securities as that term is
defined in the Securities Act.
If we use an underwriter or underwriters in the sale of securities, we will
execute an underwriting agreement with the underwriter or underwriters at the
time we reach an agreement for sale. We will set forth in the prospectus
supplement the names of the specific managing underwriter or underwriters, as
well as any other underwriters, and the terms of the transactions, including
compensation of the underwriters and dealers. This compensation may be in the
form of discounts, concessions or commissions. Underwriters and others
participating in any offering of securities may engage in transactions that
stabilize, maintain or otherwise affect the price of securities. We will
describe any of these activities in the prospectus supplement.
If a dealer is used in the sale of the securities, we or an underwriter
will sell securities to the dealer, as principal. The dealer may then resell the
securities to the public at varying prices to be determined by the dealer at the
time of resale. The prospectus supplement will set forth the name of the dealer
and the terms of the transactions.
We may directly solicit offers to purchase the securities, and we may sell
directly to institutional investors or others. These persons may be deemed to be
underwriters within the meaning of the Securities Act with respect to any resale
of the securities. The prospectus supplement will describe the terms of any
direct sales, including the terms of any bidding or auction process.
Agreements we enter into with agents, underwriters and dealers may entitle
them to indemnification by us against specified liabilities, including
liabilities under the Securities Act, or to contribution by us to payments they
may be required to make in respect of these liabilities. The prospectus
supplement will describe the terms and conditions of indemnification or
contribution.
No securities may be sold under this prospectus without delivery, in paper
format, in electronic format on the Internet, or both, of the applicable
prospectus supplement describing the method and terms of the offering.
LEGAL MATTERS
Certain legal matters with respect to the validity of the offered
securities will be passed upon for Tiffany by Gibson, Dunn & Crutcher LLP, New
York, New York. Charles K. Marquis, a Tiffany director, was a partner of Gibson,
Dunn & Crutcher LLP during 1998.
EXPERTS
The financial statements and financial statement schedule incorporated in
this prospectus by reference to the Annual Report on Form 10-K for the year
ended January 31, 1999 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
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1,450,000 SHARES
[TIFFANY & CO. LOGO]
COMMON STOCK
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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.
JULY 23, 1999
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