Coach 2006 Annual Report Download - page 40

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Minimum rentals $ 83,006 $ 77,376 $ 73,283
Contingent rentals 24,452 16,380 12,101
Total rent expense $ 107,458 $ 93,756 $ 85,384
Future minimum rental payments under noncancelable operating leases are as follows:
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2008 $ 88,966
2009 89,344
2010 86,515
2011 83,904
2012 78,582
Subsequent to 2012 256,538
Total minimum future rental payments $ 683,849
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Certain operating leases provide for renewal for periods of five to ten years at their fair rental value at the time of renewal. In the normal
course of business, operating leases are generally renewed or replaced by new leases.
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The Company’s investments consist of U.S. government and agency debt securities as well as municipal government and corporate debt
securities. As the Company has both the ability and the intent to hold 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. As of June 30, 2007 and
July 1, 2006, available-for-sale securities were $628,860 and $253,650. The remaining investments as of July 1, 2006 were held-to-
maturity. The following table shows the amortized cost, fair value, and unrealized gains and losses of the Company’s investments:
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Short-term investments:
U.S. government and agency securities $ 25,000 $ 25,000 $ — $ 49,986 $ 49,641 $ (345)
Corporate debt securities 206,675 206,675 — 198,191 197,529 (662)
Municipal securities 397,185 397,185 — 146,000 146,000 —
Short-term investments $ 628,860 $ 628,860 $ — $ 394,177 $ 393,170 $ (1,007)
As of June 30, 2007 and July 1, 2006, all held-to-maturity investments had maturities of less than one year. Auction rate securities are
included in short-term investments as they are intended to meet the short-term working capital needs of the Company and the Company can
sell or roll them over at each 7, 28 or 35 day auction cycle.
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As of the end of fiscal 2007, the Company maintained a $100,000 unsecured revolving credit facility with certain lenders and Bank of
America, N.A. as primary lender and administrative agent (the “Bank of America facility”). At Coach’s request, the Bank of America
facility was able to be expanded to $125,000. Coach paid a commitment fee of 10 to 25 basis points on any unused amounts of the Bank of
America facility and interest of LIBOR plus 45 to 100 basis points on any outstanding borrowings. The initial commitment fee was 15
basis points and the initial LIBOR margin was 62.5 basis points. At June 30, 2007, the commitment fee was 10 basis points and the
LIBOR margin was 45 basis points, reflecting an improvement in our fixed-charge coverage ratio. The facility was scheduled to expire on
October 16, 2007.
On July 26, 2007 (subsequent to the end of fiscal 2007), the Company renewed the Bank of America facility, extending the facility
expiration to July 26, 2012. At Coach’s request, the renewed Bank of America facility can be expanded to $200,000. The facility can also be
extended for two additional one-year periods, at Coach’s request. Under the renewed Bank of America facility, Coach will pay a
commitment fee of 6 to 12.5 basis points on any unused amounts and interest of LIBOR plus 20 to 55 basis points on any outstanding
borrowings.