Coach 2002 Annual Report Download - page 47

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Table of Contents
COACH, INC.
Notes to Consolidated Financial Statements
(dollars and shares in thousands, except per share data)
1. Presentation, Organization and Significant Accounting Policies
Basis of Presentation and Organization
Coach (the “Company”) was formed in 1941 and was acquired by Sara Lee Corporation in July 1985. On June 1, 2000, Coach was
incorporated under the laws of the state of Maryland. Pursuant to the Separation Agreements, Sara Lee transferred to Coach the assets and
liabilities that related to the Coach business on October 2, 2000 (the “Separation Date”).
In October 2000, Coach was listed on the New York Stock Exchange and sold 16,974 shares of its common stock, representing 19.5% of
the outstanding shares in an initial public offering. In April 2001, Sara Lee completed a distribution of its ownership in Coach via an exchange
offer.
Coach designs, produces and markets high-quality, modern American classic accessories. Coach products are manufactured primarily by
third-party suppliers. Coach markets products via Company operated retail stores and factory stores, direct mail catalogs, an e-commerce
website, and via selected upscale department and specialty retailer locations and international department, retail and duty-free shop locations.
The consolidated financial statements of Coach reflect the historical results of operations and cash flows of the Coach leather goods and
accessories business of Sara Lee during each respective period until the Separation Date. The historical financial statements have been
prepared using Sara Lee’s historical basis in the assets and liabilities and the results of Coach’s business. The financial information included
herein may not reflect the consolidated financial position, operating results, changes in stockholders’ equity and cash flows of Coach in the
future, or what they would have been had Coach been a separate, stand-alone entity during Sara Lee’s ownership. On the Separation Date,
Coach began operating as a separate legal entity.
Significant Accounting Policies
Fiscal year
The Company’s fiscal year ends on the Saturday closest to June 30. Unless otherwise stated, references to years in the financial
statements relate to fiscal years. The fiscal years ended June 28, 2003 (“fiscal 2003”), June 29, 2002 (“fiscal 2002”) and June 30, 2001
(“fiscal 2001”) were 52-week periods.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities; the disclosure of
contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the
reporting period. The level of uncertainty in estimates and assumptions increases with the length of time the underlying transactions are
completed. Actual results could differ from estimates in amounts that may be material to the financial statements.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company, all 100% owned subsidiaries and Coach Japan. All
significant intercompany transactions and balances within the Company are eliminated in consolidation.
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