Coach 2012 Annual Report Download - page 46

corporate debt securities. As the Company does not have the intent to sell and will not be required to sell
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 July 2, 2011, the Company’s
investments, classified as held-to-maturity, consisted of commercial paper and treasury bills valued at $2.3
million. These investments matured during 2012, and the Company does not hold any similar investments at
June 30, 2012. As the adjusted book value of the commercial paper and treasury bills equaled its fair value,
there were no unrealized gains or losses associated with these investments. At June 30, 2012, the Company’s
investments, classified as available-for-sale, consisted of a $6.0 million auction rate security. At June 30, 2012,
as the auction rate securities’ adjusted book value equaled its fair value, there were no unrealized gains or
losses associated with this investment.
As of June 30, 2012, the Company had no outstanding borrowings on its JP Morgan facility, its revolving
credit facility maintained by Coach Japan, and its revolving credit facility maintained by Coach Shanghai
Limited. The fair value of any future borrowing may be impacted by fluctuations in interest rates.
As of June 30, 2012, Coach’s outstanding long-term debt, including the current portion, was
$23.4 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.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See ‘‘Index to Financial Statements,’’ which is located on page 47 of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
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 Jane Nielsen, the Chief Financial Officer of the Company, has
concluded that the Company’s disclosure controls and procedures are effective as of June 30, 2012.
Management’s Report on Internal Control over Financial Reporting
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 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, 2012 and concluded that it is
effective.
The Company’s independent auditors have issued an audit report on the Company’s internal control over
financial reporting. The audit report appears on page 49 of this report.
Changes in Internal Control over Financial Reporting
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.
ITEM 9B. OTHER INFORMATION
None.
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