Coach 2007 Annual Report Download - page 41

2012 102,459
2013 96,071
Subsequent to 2013 371,502
Total minimum future rental payments $ 900,974
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 invests in auction rate securities (“ARS”), consisting of U.S. government and agency debt securities, municipal
government securities and corporate debt securities. The following table shows the fair value of the Company’s investments:
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Short-term investments:
U.S. government and agency securities $ — $ 25,000
Corporate debt securities — 206,675
Municipal securities — 397,185
Short-term investments $ — $ 628,860
Long-term investments:
Corporate debt securities $ 8,000 $ —
Long-term investments $ 8,000 $ —
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As of June 30, 2007, ARS were included in short-term investments as they were intended to meet the short-term working capital needs of
the Company and the Company could offer to sell the securities or roll them over at each 7, 28 or 35 day auction cycle. During fiscal 2008,
the Company sold the majority of its ARS at auction. At the end of fiscal 2008, the Company held one ARS, classified as a long-term
investment, as the auction for this security has been unsuccessful. The underlying investments of the ARS are scheduled to mature in 2035.
During fiscal 2008, the Company recorded an impairment charge of $700 as the fair value of the ARS was deemed to be other-than-
temporarily impaired. There were no realized gains or losses recorded in fiscal 2007 or fiscal 2006. As of June 28, 2008 and June 30, 2007,
there were no unrealized gains or losses on the Company’s investments.
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On July 26, 2007, the Company renewed its $100,000 revolving credit facility with certain lenders and Bank of America, N.A. as the
primary lender and administrative agent (the “Bank of America facility”), extending the facility expiration to July 26, 2012. At Coach’s
request, the 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 Bank of America facility, Coach pays 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. At June 28, 2008, the commitment fee was 6 basis points and
the LIBOR margin was 20 basis points.
The Bank of America facility is available for seasonal working capital requirements or general corporate purposes and may be prepaid
without penalty or premium. During fiscal 2008 and fiscal 2007 there were no borrowings under the Bank of America facility. Accordingly,
as of June 28, 2008 and June 30, 2007, there were no outstanding borrowings under the Bank of America facility.
The Bank of America facility contains various covenants and customary events of default. Coach has been in compliance with all
covenants since its inception.
To provide funding for working capital and general corporate purposes, Coach Japan has available credit facilities with several Japanese
financial institutions. These facilities allow a maximum borrowing of 7.4 bil-
lion yen, or approximately $70,000, at June 28, 2008. Interest is based on the Tokyo Interbank rate plus a margin of up to 50 basis points.
During fiscal 2008 and fiscal 2007, the peak borrowings under the Japanese credit facilities were $26,790 and $25,518, respectively.
As of June 28, 2008 and June 30, 2007, there were no outstanding borrowings under the Japanese credit facilities.