Coach 2006 Annual Report Download - page 44

Other 481 20,222
Total deferred tax liabilities $ 40,043 $ 41,152
Net deferred tax assets $ 114,308 $ 120,944
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Significant judgment is required in determining the worldwide provision for income taxes, and there are many transactions for which the
ultimate tax outcome is uncertain. It is the Company’s policy to establish provisions for taxes that may become payable in future years as a
result of an examination by tax authorities. The Company establishes the provisions based upon management’s assessment of exposure
associated with permanent tax differences and tax credits. The provisions are analyzed periodically and adjustments are made as events
occur that warrant adjustments to those provisions.
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Coach maintains the Coach, Inc. Savings and Profit Sharing Plan, which is a defined contribution plan. Employees who meet certain
eligibility requirements and are not part of a collective bargaining agreement may participate in this program. The annual expense incurred
by Coach for this defined contribution plan was $9,365, $7,714 and $8,621 in fiscal 2007, 2006 and 2005, respectively.
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Coach sponsors a noncontributory defined benefit plan, The Coach, Inc. Supplemental Pension Plan, (the “U.S. Plan”) for individuals
who are part of collective bargaining arrangements in the U.S. The U.S. Plan provides benefits based on years of service. Coach Japan
sponsors a defined benefit plan for individuals who meet certain eligibility requirements. This plan provides benefits based on employees’
years of service and earnings. The Company uses a March 31 measurement date for its defined benefit retirement plans.
In September 2006, the FASB issued SFAS 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans — an amendment of FASB Statements No. 87, 88, 106 and 132(R).” SFAS 158 requires an employer to recognize the funded status
of a benefit plan, measured as the difference between plan assets at fair value and the projected benefit obligation, in its statement of
financial position. SFAS 158 also requires an employer to measure defined benefit plan assets and obligations as of the date of the
employer’s fiscal year-end statement of financial position. This statement is effective as of the end of the fiscal year ended June 30, 2007,
except for the requirement to measure plan assets and obligations as of the date of the employer’s fiscal year-end statement of financial
position, which is effective for the fiscal year ending June 27, 2009. The following table shows the incremental effect of adopting SFAS 158
on individual line items within the Consolidated Balance Sheet as of June 30, 2007:
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Deferred tax assets $ 85,883 $ 163 $ 86,046
Total assets 2,449,349 163 2,449,512
Other liabilities 91,448 401 91,849
Total liabilities 538,757 401 539,158
Accumulated other comprehensive loss, net of tax (12,554) (238) (12,792)
Total stockholders' equity 1,910,592 (238) 1,910,354
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