Coach 2009 Annual Report Download - page 33

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TABLE OF CONTENTS
The year-over-year comparisons of our financial results are affected by the following items included in our reported results:
Fiscal Year Ended
(dollars in millions,
except per share data)
June 27,
2009
June 28,
2008
Operating income
Cost savings measures $ (13.4) $ —
Charitable foundation contribution (15.0) (20.0)
Non-recurring variable expense — (12.1)
Total Operating income impact $ (28.4) $ (32.1)
Interest Income, net
Tax-related interest adjustments $ 2.0 $ 10.7
Total Interest income, net impact $ 2.0 $ 10.7
Provision for income taxes
Cost savings measures $ (5.1) $ —
Charitable foundation contribution (5.7) (7.8)
Tax adjustments (16.8) (50.0)
Non-recurring variable expense — (4.7)
Total Provision for income taxes impact $ (27.6) $ (62.5)
Net income
Cost savings measures $ (8.3) $ —
Charitable foundation contribution (9.3) (12.2)
Tax adjustments 18.8 60.6
Non-recurring variable expense — (7.4)
Total Net income impact $ 1.2 $ 41.0
Diluted earnings per share
Cost savings measures $ (0.03) $ —
Charitable foundation contribution (0.03) (0.03)
Tax adjustments 0.06 0.17
Non-recurring variable expense — (0.02)
Total Diluted earnings per share impact $ 0.00 $ 0.11
Fiscal 2009 Items
Cost Savings Measures
During the third quarter of fiscal 2009, the Company recorded a charge of $13.4 million, related to cost savings initiatives. These
initiatives included the elimination of approximately 150 positions from the Company’s corporate offices in New York, New Jersey and
Jacksonville, the closure of four underperforming retail stores and the closure of Coach Europe Services, the Company’s sample-making
facility in Italy. Prior to these cost savings measures in fiscal 2009, the Company had no recent past history of similar elimination of
positions, closure of facilities, or closure of underperforming stores during the stores’ lease terms.
Charitable Contribution and Tax Adjustments
During the fourth quarter of fiscal 2009, the Company decreased the provision for income taxes by $16.8 million and increased interest
income by $2.0 million, primarily as a result of a favorable settlement of a multi-year tax return examination and other tax accounting
adjustments. The underlying events and circumstances for the tax settlement and adjustments were not related to the fiscal 2008 settlement.
The Company used the net income favorability to contribute $15.0 million to the Coach Foundation. The Company believed that in order to
reflect the direct results of the normal, ongoing business operations, both the tax
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