Estee Lauder 2007 Annual Report Download - page 87

NOTE 18 — UNAUDITED QUARTERLY FINANCIAL DATA
The following summarizes the unaudited quarterly operating results of the Company for the years ended June 30, 2007
and 2006:
Quarter Ended
September 30 December 31 March 31 June 30 Total Year
(In millions, except per share data)
Fiscal 2007
Net sales $1,593.5 $1,991.1 $1,690.5 $1,762.4 $7,037.5
Gross profi t 1,165.4 1,492.1 1,264.5 1,340.7 5,262.7
Operating income 99.9 332.4 156.7 160.9 749.9
Net earnings from continuing
operations 58.0 208.5 93.8 88.4 448.7
Net earnings 58.3 208.4 93.9 88.6 449.2
Net earnings per common share
from continuing operations:
Basic .28 1.00 .46 .46 2.20
Diluted .27 .99 .45 .45 2.16
Net earnings per common share:
Basic .28 1.00 .46 .46 2.20
Diluted .27 .99 .45 .45 2.16
Fiscal 2006(a)(b)
Net sales $1,497.1 $1,783.9 $1,578.2 $1,604.6 $6,463.8
Gross profi t 1,077.6 1,325.4 1,166.7 1,207.5 4,777.2
Operating income 105.1 250.7 116.3 147.5 619.6
Net earnings from continuing
operations 61.8 150.4 63.2 49.1 324.5
Net earnings 58.5 81.7 59.5 44.5 244.2
Net earnings per common share
from continuing operations:
Basic .28 .70 .30 .23 1.51
Diluted .28 .70 .29 .23 1.49
Net earnings per common share:
Basic .26 .38 .28 .21 1.14
Diluted .26 .38 .28 .21 1.12
(a) Fiscal 2006 results included $93.0 million, after-tax, or $.43 per diluted share in special charges related to the Company’s cost savings initiative and
tax-related matters. Included in the charges was an operating expense charge of $92.1 million, equal to $.27 per diluted common share related to
the cost savings initiative. The results also included a special tax charge related to a settlement with the IRS regarding an examination of the
Company’s consolidated Federal income tax returns for fi scal years 1998 through 2001, and represents the aggregate earnings impact of
the settlement through fi scal 2006. The settlement resulted in an increase to the Company’s fi scal 2006 income tax provision and a corresponding
decrease in fi scal 2006 net earnings of approximately $46 million, or approximately $.21 per diluted common share. During the fourth quarter of
fi scal 2006, the Company completed the repatriation of foreign earnings through intercompany dividends under the provisions of the AJCA.
In connection with the repatriation, the Company updated the computation of the related aggregate tax impact, resulting in a favorable adjustment
of approximately $11 million, or approximately $.05 per diluted common share, to the Company’s initial tax charge of $35 million recorded in
fi scal 2005. The tax settlement, coupled with the AJCA favorable tax adjustment, resulted in a net increase to the Company’s fi scal 2006
income tax provision and a corresponding decrease in fi scal 2006 net earnings of approximately $35 million, or approximately $.16 per diluted
common share.
(b)
In April 2006, the Company completed the sale of certain assets and operations of the reporting unit that marketed and sold Stila brand products.
NOTE 19 — UNAUDITED SUBSEQUENT EVENTS
In July 2007, the Company acquired Ojon Corporation, which markets and sells Ojon hair care and skin care products
primarily through direct response television and specialty stores. In August 2007, the Company sold Rodan + Fields back
to its founders.
In August 2007, pursuant to the Company’s accelerated share repurchase program (see Note 12 — Common Stock),
the fi nancial counterparty informed the Company that it had completed its obligations under the agreement. The per-share
price paid by the Company at inception of the program exceeded the fi nal VWAP. Accordingly, the Company received
97,417 shares of its common stock from the fi nancial counterparty as a price adjustment and fi nal settlement, which was
recorded as treasury stock and additional paid-in capital in the consolidated balance sheet.
86 THE EST{E LAUDER COMPANIES INC.