Estee Lauder 2010 Annual Report Download - page 148

THE EST{E LAUDER COMPANIES INC. 147
NOTE 20 — SEGMENT DATA AND
RELATED INFORMATION
Reportable operating segments include components of
an enterprise about which separate financial information
is available that is evaluated regularly by the chief operat-
ing decision maker (the “Chief Executive”) in deciding
how to allocate resources and in assessing performance.
As a result of the similarities in the manufacturing, market-
ing and distribution processes for all of the Company’s
products, much of the information provided in the con-
solidated financial statements is similar to, or the same as,
that reviewed on a regular basis by the Chief Executive.
Although the Company operates in one business segment,
beauty products, management also evaluates perfor-
mance on a product category basis.
While the Company’s results of operations are also
reviewed on a consolidated basis, the Chief Executive
reviews data segmented on a basis that facilitates
comparison to industry statistics. Accordingly, net sales,
depreciation and amortization, and operating income are
available with respect to the manufacture and distribution
of skin care, makeup, fragrance, hair care and other prod-
ucts. These product categories meet the definition of
operating segments and, accordingly, additional financial
data are provided below. The “other” segment includes
the sales and related results of ancillary products and ser-
vices that do not fit the definition of skin care, makeup,
fragrance and hair care.
Product category performance is measured based
upon net sales before returns associated with restructuring
activities, and earnings before income taxes, net interest
expense, interest expense on debt extinguishment and
total charges associated with restructuring activities.
Returns and charges associated with restructuring activi-
ties are not allocated to the product categories because
they result from activities that are deemed a company-
wide program to redesign the Company’s organizational
structure. The accounting policies for the Company’s
reportable segments are the same as those described in
the summary of significant accounting policies, except for
depreciation and amortization charges, which are
allocated, primarily, based upon net sales. The assets and
liabilities of the Company are managed centrally and are
reported internally in the same manner as the consoli-
dated financial statements; thus, no additional information
is produced for the Chief Executive or included herein.
NOTE 19 — STATEMENT OF CASH FLOWS
Supplemental cash flow information for fiscal 2010, 2009 and 2008 is as follows:
2010 2009 2008
(In millions)
Cash:
Cash paid during the year for interest $106.0 $ 77.2 $ 74.1
Cash paid during the year for income taxes $265.2 $230.2 $249.9
Non-cash investing and financing activities:
Long-term debt issued upon acquisition of business $— $— $ 23.9
Incremental tax benefit from the exercise of stock options $ (21.3) $ (7.8) $ 10.9
Change in liability associated with acquisition of business $ 7.0 $ 5.9 $ 8.3
Capital lease obligations incurred $ 22.5 $ 15.5 $ 9.7
Accrued dividend equivalents $ 0.2 $ 0.1 $ 0.2
Interest rate swap derivative mark to market $ 14.2 $ 13.6 $ 19.5
2010
$106.0
$265.2
$—
$ (21.3)
$ 7.0
$ 22.5
$ 0.2
$ 14.2