Avon 2007 Annual Report Download - page 65

credit facility is designated as a hedge of our net investment in
our Japanese subsidiary. In August 2007, we entered into an
amendment of our one-year, Japanese yen 11.0 billion ($96.3 at
the exchange rate on December 31, 2007) uncommitted credit
facility with the Bank of Tokyo-Mitsubishi UFJ, Ltd. The amend-
ment provides for the extension of the yen credit facility until
August 2008. At December 31, 2007, $96.3 (Japanese yen 11.0
billion) was outstanding under the yen credit family.
At December 31, 2007, we had an international committed line
of credit of $5.1 with no amount outstanding. The fees on this
line are .25% on the unused portion and the greater of the
Canadian prime rate or the Canadian 30-day B. A. plus 5/8% on
outstanding amounts.
At December 31, 2007, we were in compliance with all cove-
nants in our indentures. Such indentures do not contain any
rating downgrade triggers that would accelerate the maturity of
our debt.
At December 31, 2007 and 2006, we also had letters of credit
outstanding totaling $18.4 and $24.8, respectively, which
primarily guarantee various insurance activities. In addition, we
had outstanding letters of credit for various trade activities and
commercial commitments executed in the ordinary course of
business, such as purchase orders for normal replenishment of
inventory levels.
NOTE 5. Accumulated Other
Comprehensive Loss
Accumulated other comprehensive loss at December 31 con-
sisted of the following:
2007 2006
Foreign currency translation adjustments $ (62.5) $(256.3)
Unrealized gains from available-for-sale
securities, net of taxes of $.1 and $.1 .4 .3
Unrecognized actuarial losses, prior service
credit, and transition obligation, net of
taxes of $165.7 and $202.2 (337.2) (400.0)
Net derivative losses from cash flow hedges,
net of taxes of $9.7 and $.2 (17.7) (.3)
Total $(417.0) $(656.3)
Foreign exchange losses of $8.1 resulting from the translation of
unrealized actuarial losses, prior service credit and translation
obligation recorded in AOCI are included in foreign currency
translation adjustments in the rollforward of AOCI on the Con-
solidated Statements of Changes in Shareholders Equity.
A fixed-income portfolio included in a grantor trust and mutual
funds that are used to make benefit payments under
non-qualified benefit plans are classified as available-for-sale and
recorded at current market value (see Note 10, Employee Benefit
Plans).
The cost, gross unrealized gains and losses and market value of
the available-for-sale securities as of December 31, were as
follows:
2007
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Market
Value
U.S. government bonds (1) $.5 $– $–$.5
State and municipal
bonds (1) 13.3 – – 13.3
Mortgage backed
securities (1) .7 – – .7
Other (1) 3.5 .5 – 4.0
Total available-for-sale
securities (2) $18.0 $.5 $– $18.5
(1) At December 31, 2007, investments with scheduled maturities in less
than two years totaled $2.0, two to five years totaled $2.5, and more
than five years totaled $10.5.
(2) At December 31, 2007, there were no investments with unrealized
losses in a loss position for greater than 12 months.
Payments for the purchases, proceeds and gross realized gains
and losses from the sales of these securities totaled $47.0,
$46.1, $.1 and $(.1), respectively, during 2007.
The cost, gross unrealized gains and losses and market value of
the available-for-sale securities as of December 31, were as
follows:
2006
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Market
Value
U.S. government bonds (1) $ 2.6 $ – $– $ 2.6
State and municipal
bonds (1) 9.9 – – 9.9
Mortgage backed
securities (1) .8 – – .8
Other (1) 3.8 .4 – 4.2
Total available-for-sale
securities (2) $17.1 $.4 $– $17.5
(1) At December 31, 2006, investments with scheduled maturities in less
than two years totaled $3.0, two to five years totaled $1.6, and more
than five years totaled $9.1.
(2) At December 31, 2006, there were no investments with unrealized
losses in a loss position for greater than 12 months.
A V O N 2007 F-13