Estee Lauder 2002 Annual Report Download - page 53

Effective January 1, 2002, we adopted the Emerging Issues
Task Force (“EITF”) Issue No. 01-9, “Accounting for
Consideration Given by a Vendor to a Customer”, which
codified and reconciled the following EITF Issues: Issue
No. 00-14, “Accounting for Certain Sales Incentives”, Issue
No. 00-22, “Accounting for Points and Certain Other
Time-Based or Volume-Based Sales Incentive Offers, and
Offers for Free Products or Services to be Delivered in
the Future”, and Issue No. 00-25, “Vendor Income State-
ment Characterization of Consideration Paid to a Reseller
of the Vendor’s Products”. Issue No. 00-14 addressed
when sales incentives and discounts should be recog-
nized, as well as where the related revenues and expenses
should be classified in the financial statements. Upon
adoption of this Issue, we reclassified revenues generated
from our purchase with purchase activities as sales and
the costs of our purchase with purchase and gift with
purchase activities as cost of sales, which were previously
reported net as operating expenses. Operating income
has remained unchanged by this adoption. These reclassi-
fications have been reported in the accompanying
consolidated statements of earnings retroactively for all
periods reported.
In August 2001, the Financial Accounting Standards
Board issued SFAS No. 144, “Accounting for the Impair-
ment or Disposal of Long-Lived Assets”. This statement
addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. SFAS No. 144
will be effective for financial statements relating to fiscal
years beginning after December 15, 2001. We will adopt
this statement for our fiscal year ending June 30, 2003
and do not anticipate that it will have a material impact
on our consolidated financial results.
In June 2002, the Financial Accounting Standards
Board issued SFAS No. 146, “Accounting for Costs Asso-
ciated with Exit or Disposal Activities”. This statement
covers restructuring type activities beginning with plans
initiated after December 31, 2002. Should we enter into
activities covered by this standard after that date,
the provisions of SFAS No. 146 would be applied. As a
result of this standard, there is no impact on our consoli-
dated financial position or results of operations for the
periods presented.
THEEST{E LAUDER COMPANIES INC. 52
The following table presents adjusted net earnings and earnings per share data restated to include the retroactive impact
of the adoption of SFAS No. 142.
YEAR ENDED JUNE 30 2002 2001 2000
(In millions, except per share data)
Reported Net Earnings before Accounting Change $212.5 $307.4 $314.1
Cumulative effect of a change in accounting principle, net of tax (20.6) (2.2) —
Net Earnings 191.9 305.2 314.1
Preferred stock dividends 23.4 23.4 23.4
Reported Net Earnings Attributable to Common Stock 168.5 281.8 290.7
Add back: Goodwill amortization, net of tax —13.4 11.1
Adjusted Net Earnings $168.5 $295.2 $301.8
Basic net earnings per common share:
Reported net earnings attributable to common stock before accounting change $.79 $ 1.19 $ 1.22
Cumulative effect of a change in accounting principle, net of tax (.08) (.01) —
Net earnings attributable to common stock .71 1.18 1.22
Goodwill amortization, net of tax —.06 .05
Adjusted net earnings attributable to common stock $.71 $ 1.24 $ 1.27
Diluted net earnings per common share:
Reported net earnings attributable to common stock before accounting change $.78 $ 1.17 $ 1.20
Cumulative effect of a change in accounting principle, net of tax (.08) (.01) —
Net earnings attributable to common stock .70 1.16 1.20
Goodwill amortization, net of tax —.06 .04
Adjusted net earnings attributable to common stock $.70 $ 1.22 $ 1.24
Weighted average common shares outstanding:
Basic 238.2 238.4 237.7
Diluted 241.1 242.2 242.5