Coach 2008 Annual Report Download - page 57

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TABLE OF CONTENTS
COACH, INC.
Notes to Consolidated Financial Statements
(dollars and shares in thousands, except per share data)
5. Share-Based Compensation – (continued)
Deferred Compensation
Under the Coach, Inc. Deferred Compensation Plan for Non-Employee Directors, Coach’s outside directors may defer their director’s
fees. Amounts deferred under these plans may, at the participants’ election, be either represented by deferred stock units, which represent the
right to receive shares of Coach common stock on the distribution date elected by the participant, or placed in an interest-bearing account to
be paid on such distribution date. The amounts accrued under these plans at June 27, 2009 and June 28, 2008 were $2,480 and $2,288,
respectively, and are included within total liabilities in the consolidated balance sheets.
6. Leases
Coach leases certain office, distribution and retail facilities. The lease agreements, which expire at various dates through 2028, are
subject, in some cases, to renewal options and provide for the payment of taxes, insurance and maintenance. Certain leases contain
escalation clauses resulting from the pass-through of increases in operating costs, property taxes and the effect on costs from changes in
consumer price indices. Certain rentals are also contingent upon factors such as sales.
Rent-free periods and scheduled rent increases are recorded as components of rent expense on a straight-line basis over the related terms
of such leases. Contingent rentals are recognized when the achievement of the target (i.e., sales levels), which triggers the related payment, is
considered probable. Rent expense for the Company’s operating leases consisted of the following:
Fiscal Year Ended
June 27,
2009
June 28,
2008
June 30,
2007
Minimum rentals $ 107,272 $ 92,675 $ 83,006
Contingent rentals 43,995 40,294 24,452
Total rent expense $ 151,267 $ 132,969 $ 107,458
Future minimum rental payments under noncancelable operating leases are as follows:
Fiscal Year Amount
2010 $ 127,301
2011 123,933
2012 114,422
2013 103,867
2014 89,964
Subsequent to 2014 317,884
Total minimum future rental payments $ 877,371
Certain operating leases provide for renewal for periods of five to ten years at their fair rental value at the time of renewal. In the normal
course of business, operating leases are generally renewed or replaced by new leases.
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