Estee Lauder 2010 Annual Report Download - page 147

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146 THE EST{E LAUDER COMPANIES INC.
NOTE 18 —ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The components of Accumulated other comprehensive income (“AOCI”) included in the accompanying consolidated
balance sheets consist of the following:
YEAR ENDED JUNE 30 2010 2009 2008
(In millions)
Net unrealized investment gains, beginning of year $ (0.2) $ 0.3 $ 0.8
Unrealized investment gains (losses) 0.6 (0.8) (0.9)
Benefit (provision) for deferred income taxes (0.2) 0.3 0.4
Net unrealized investment gains, end of year 0.2 (0.2) 0.3
Net derivative instruments, beginning of year 1.5 7.9 8.2
Gain (loss) on derivative instruments (0.2) 16.5 (4.7)
Benefit (provision) for deferred income taxes on derivative instruments (0.1) (5.8) 1.6
Reclassification to earnings during the year:
Foreign currency forward and option contracts 20.3 (26.1) 4.4
Settled interest rate-related derivatives (0.2) (0.3) (0.2)
Benefit (provision) for deferred income taxes on reclassification (7.0) 9.3 (1.4)
Net derivative instruments, end of year 14.3 1.5 7.9
Net pension and post-retirement adjustments, beginning of year (190.7) (108.8) (67.4)
Changes in plan assets and benefit obligations:
Net actuarial gains (losses) recognized (65.6) (138.5) (38.2)
Net prior service credit (cost) recognized 2.6 (0.7) (34.0)
Translation adjustments 6.5 8.7 (0.3)
Amortization of amounts included in net periodic benefit cost:
Net actuarial (gains) losses 9.3 4.1 8.4
Net prior service cost (credit) 3.1 3.0 1.0
Net transition asset (obligation) — — 0.1
Benefit (provision) for deferred income taxes 17.2 41.5 21.6
Net pension and post-retirement adjustments, end of year (217.6) (190.7) (108.8)
Cumulative translation adjustments, beginning of year 72.3 211.4 113.1
Translation adjustments (65.5) (138.4) 103.7
Benefit (provision) for deferred income taxes (0.4) (0.7) (5.4)
Cumulative translation adjustments, end of year 6.4 72.3 211.4
Accumulated other comprehensive income (loss) $(196.7) $(117.1) $ 110.8
2010
$ (0.2)
0.6
(0.2)
0.2
1.5
(0.2)
(0.1)
20.3
(0.2)
(7.0)
14.3
(190.7)
(65.6)
2.6
6.5
9.3
3.1
—
17.2
(217.6)
72.3
(65.5)
(0.4)
6.4
$(196.7)
Of the $14.3 million, net of tax, derivative instrument gain recorded in AOCI at June 30, 2010, $8.6 million, net of tax,
related to the October 2003 gain from the settlement of the treasury lock agreements upon the issuance of the Company’s
5.75% Senior Notes due October 2033, which is being reclassified to earnings as an offset to interest expense over the
life of the debt. Also included in the net derivative instrument gain recorded in OCI was $6.3 million in gains, net of tax,
related to foreign currency forward and option contracts which the Company will reclassify to earnings during the next
twelve months. These gains were partially offset by $0.6 million, net of tax, related to a loss from the settlement of a series
of forward-starting interest rate swap agreements upon the issuance of the Company’s 6.00% Senior Notes due May 2037,
which will be reclassified to earnings as an addition to interest expense over the life of the debt.
Refer to Note 13 — Pension, Deferred Compensation and Post-retirement Benefit Plans for the discussion regarding the
net pension and post-retirement adjustments.