Coach 2006 Annual Report Download - page 26

purposes. The Company’s investment portfolio consists of U.S. government and agency securities as well as municipal government and
corporate debt securities. As the Company has both the ability and intent to hold these securities until maturity, investments are classified as
held-to-maturity and stated at amortized cost, except for auction rate securities, which are classified as available-for-sale. At June 30, 2007,
the Company’s short term investments consisted of $628.9 million of auction rate securities. As auction rate securities’ market price equals
its fair value, there are no unrealized gains or losses associated with these investments.
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As of June 30, 2007, the Company did not have any outstanding borrowings on its revolving credit facilities and the Company does not
expect to borrow against the facilities in the foreseeable future. However, the fair value of any outstanding borrowings in the future may be
impacted by fluctuations in interest rates.
As of June 30, 2007, Coach’s outstanding long-term debt, including the current portion, was $3.1 million. A hypothetical 10% change
in the interest rate applied to the fair value of debt would not have a material impact on earnings or cash flows of Coach.

See “Index to Financial Statements,” which is located on page 36 of this report.

None.


Based on the evaluation of the Company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934, as amended, each of Lew Frankfort, the Chief Executive Officer of the Company, and Michael F. Devine,
III, the Chief Financial Officer of the Company, has concluded that the Company’s disclosure controls and procedures are effective as of
June 30, 2007.

The Company’s management is responsible for establishing and maintaining adequate internal controls over financial reporting. The
Company’s internal control system was designed to provide reasonable assurance to the Company’s management and board of directors
regarding the preparation and fair presentation of published financial statements. Management evaluated the effectiveness of the Company’s
internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway
Commission in Internal Control-Integrated Framework. Management, under the supervision and with the participation of the Company’s
Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as
of June 30, 2007 and concluded that it is effective.
The Company’s independent auditors have issued an audit report on management’s assessment of the effectiveness of internal control
over financial reporting and on the Company’s internal control over financial reporting. This report appears on page 38.

There were no changes in internal control over financial reporting that occurred during the fourth fiscal quarter that have materially
affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

None.
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

The information set forth in the Proxy Statement for the 2007 Annual Meeting of Stockholders is incorporated herein by reference. The
Proxy Statement will be filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended.
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