Coach 2009 Annual Report Download - page 68

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TABLE OF CONTENTS
COACH, INC.
Notes to Consolidated Financial Statements
(dollars and shares in thousands, except per share data)
13. 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 stores in North America, Japan, Hong Kong, Macau and mainland China, the Internet and the Coach catalog constitute
the Direct-to-Consumer segment. The Indirect segment includes sales to wholesale customers and distributors in over 20 countries, including
the United States, and royalties earned on licensed products. 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. Unallocated corporate expenses include production variances, general marketing, administration and
information systems, as well as distribution and consumer service expenses.
In connection with the acquisitions of the retail businesses in Hong Kong, Macau and mainland China, the Company evaluated the
composition of its reportable segments and concluded that sales in these regions should be included in the Direct-to-Consumer segment.
Accordingly, all prior year comparable sales and operating income have been reclassified to conform to the current year presentation.
Direct-to-
Consumer
Indirect Corporate
Unallocated
Total
Fiscal 2010
Net sales $ 3,155,860 $ 451,776 $ — $ 3,607,636
Operating income (loss) 1,245,400 256,637 (351,866) 1,150,171
Income (loss) before provision for income taxes and
discontinued operations
1,245,400 256,637 (350,109) 1,151,928
Depreciation and amortization expense 85,110 10,138 31,496 126,744
Total assets 1,294,445 120,739 1,051,931 2,467,115
Additions to long-lived assets 45,003 9,088 26,307 80,398
Fiscal 2009
Net sales $ 2,726,891 $ 503,577 $ — $ 3,230,468
Operating income (loss) 996,285 290,981 (315,353) 971,913
Income (loss) before provision for income taxes and
discontinued operations
996,285 290,981 (310,185) 977,081
Depreciation and amortization expense 82,539 10,394 30,081 123,014
Total assets 1,311,341 86,235 1,166,760 2,564,336
Additions to long-lived assets 82,852 7,242 158,665 248,759
Fiscal 2008
Net sales $ 2,557,872 $ 622,885 $ — $ 3,180,757
Operating income (loss) 1,094,321 399,401 (346,593) 1,147,129
Income (loss) before provision for income taxes and
discontinued operations
1,094,321 399,401 (298,773) 1,194,949
Depreciation and amortization expense 67,485 9,704 23,515 100,704
Total assets 1,035,621 119,561 1,092,171 2,247,353
Additions to long-lived assets 120,288 24,252 43,123 187,663
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