Coach 2012 Annual Report Download - page 74

COACH, INC.
Notes to Consolidated Financial Statements (Continued)
(dollars and shares in thousands, except per share data)
13. SEGMENT INFORMATION − (continued)
Hong Kong, Macau and mainland China; Singapore; Taiwan and the Internet constitute the
Direct-to-Consumer segment. Beginning with the first quarter of fiscal 2013, this segment also includes
Coach-operated stores in Malaysia and Korea. 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 chief operating decision maker regularly
evaluates 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, mainland China,
Singapore and Taiwan, 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, prior year net
sales, operating income and profit before tax figures have been reclassified to conform to the current year
presentation.
Direct-to-
Consumer Indirect
Corporate
Unallocated Total
Fiscal 2012
Net sales ............................. $4,231,698 $531,482 $ — $4,763,180
Operating income (loss) ................... 1,733,612 298,593 (520,216) 1,511,989
Income (loss) before provision for income taxes . . 1,733,612 298,593 (527,302) 1,505,663
Depreciation and amortization expense ......... 90,733 9,049 33,127 132,909
Total assets ........................... 1,546,225 107,135 1,450,961 3,104,321
Additions to long-lived assets ............... 121,426 7,085 69,776 198,287
Fiscal 2011
Net sales ............................. $3,646,424 $512,083 $ — $4,158,507
Operating income (loss) ................... 1,438,998 280,225 (414,299) 1,304,924
Income (loss) before provision for income taxes . . 1,438,998 280,225 (418,004) 1,301,219
Depreciation and amortization expense ......... 82,333 11,273 31,500 125,106
Total assets ........................... 1,454,106 109,514 1,071,496 2,635,116
Additions to long-lived assets ............... 106,556 8,671 39,424 154,651
Fiscal 2010
Net sales ............................. $3,178,735 $428,901 $ — $3,607,636
Operating income (loss) ................... 1,260,503 241,534 (351,866) 1,150,171
Income (loss) before provision for income taxes . . . 1,260,503 241,534 (343,905) 1,158,132
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
71