Coach 2002 Annual Report Download - page 63

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Table of Contents
COACH, INC.
Notes to Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
Fiscal Year Ended
June 28, June 29, June 30,
2003 2002 2001
Fair value of plan assets:
Beginning of year $4,740 $4,605 $4,990
Actual return (loss) on plan assets (659) 322 (208)
Employer contributions — — —
Benefits paid (218) (187) (177)
Fair value of plan assets at end of year $3,863 $4,740 $4,605
Fiscal Year Ended
June 28, June 29, June 30,
2003 2002 2001
Funded status $(2,120) $(675) $(909)
Unrecognized:
Prior service cost 1 1 1
Net actuarial loss 2,244 850 1,156
Net initial asset — — —
Prepaid benefit cost recognized $125 $176 $248
Amounts recognized on the consolidated balance sheets:
Other noncurrent assets $1 $1 $1
Accrued benefit liability (2,120) (675) (909)
Accumulated other comprehensive income 2,244 850 1,156
Prepaid benefit cost recognized $125 $176 $248
Net pension expense for the Coach Leatherware Company, Inc. Plan is determined using assumptions as of the beginning of each year.
Funded status is determined using assumptions as of the end of each year.
The assumptions used at the respective year-ends were:
Fiscal Year Ended
June 28, June 29, June 30,
2003 2002 2001
Discount rate 6.50% 7.00% 6.50%
Long-term rate of return on plan assets 7.50% 8.25% 8.50%
Rate of compensation increase 5.50% 5.50% 5.50%
10. Segment Information
The Company operates its business in two reportable segments: Direct-to-Consumer and Indirect. The Company’s reportable segments
represent channels of distribution that offer similar merchandise, service and marketing strategies. Sales of Coach products through
Company-operated retail and factory stores, the Coach catalog and the Internet constitute the Direct-to-Consumer segment. Indirect refers to
sales of Coach products to other retailers and includes sales through Coach Japan. In deciding how to allocate resources and assess
performance, Coach’s executive officers regularly evaluate the sales and operating income of these segments. Operating income is the gross
margin of the segment less direct expenses of the segment.
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