Estee Lauder 2010 Annual Report Download - page 82

THE EST{E LAUDER COMPANIES INC. 81
The table below summarizes selected financial information. For further information, refer to the audited consolidated
financial statements and the notes thereto beginning on page 108 of this report.
YEAR ENDED OR AT JUNE 30 2010(a) 2009(a) 2008 2007 2006(b)
(In millions, except per share data)
STATEMENT OF EARNINGS DATA:
Net sales $7,795.8 $7,323.8 $7,910.8 $7,037.5 $6,463.8
Gross profit 5,966.4 5,442.2 5,914.0 5,262.7 4,777.2
Operating income 789.9 418.4 810.7 749.9 619.6
Interest expense, net(c) 74.3 75.7 66.8 38.9 23.8
Interest expense on debt extinguishment(d) 27.3 — — — —
Earnings before income taxes and discontinued operations 688.3 342.7 743.9 711.0 595.8
Provision for income taxes 205.9 115.9 259.9 255.2 259.7
Net earnings from continuing operations 482.4 226.8 484.0 455.8 336.1
Discontinued operations, net of tax(e) — — — 0.5 (80.3)
Net earnings attributable to noncontrolling interests (4.1) (8.4) (10.2) (7.1) (11.6)
Net earnings attributable to The Estée Lauder
Companies Inc. 478.3 218.4 473.8 449.2 244.2
CASH FLOW DATA:
Net cash flows provided by operating activities $ 956.7 $ 696.0 $ 690.1 $ 661.6 $ 709.8
Net cash flows used for investing activities (281.4) (339.5) (478.5) (373.8) (303.2)
Net cash flows provided by (used for) financing activities (406.1) 125.8 (78.1) (411.6) (594.6)
PER SHARE DATA:
Net earnings per common share from
continuing operations(e):
Basic $ 2.44 $ 1.16 $ 2.50 $ 2.23 $ 1.56
Diluted $ 2.40 $ 1.15 $ 2.46 $ 2.19 $ 1.55
Net earnings attributable to The Estée Lauder
Companies Inc. per common share:
Basic $ 2.42 $ 1.11 $ 2.44 $ 2.20 $ 1.14
Diluted $ 2.38 $ 1.10 $ 2.40 $ 2.16 $ 1.12
Weighted average common shares outstanding(f):
Basic 197.7 196.3 193.9 204.3 215.0
Diluted 200.7 197.7 197.1 207.8 217.4
Cash dividends declared per common share $ .55 $ .55 $ .55 $ .50 $ .40
BALANCE SHEET DATA:
Working capital $1,548.8 $1,453.3 $1,088.0 $ 738.7 $ 738.7
Total assets 5,335.6 5,176.6 5,011.2 4,125.7 3,784.1
Total debt(c)(d) 1,228.4 1,421.4 1,196.9 1,088.5 521.5
Stockholders’ equity—The Estée Lauder Companies Inc.
(f)
1,948.4 1,640.0 1,653.2 1,199.0 1,622.3
2010
(a)
$7,795.8
5,966.4
789.9
74.3
27.3
688.3
205.9
482.4
—
(4.1)
478.3
$ 956.7
(281.4)
(406.1)
$ 2.44
$ 2.40
$ 2.42
$ 2.38
197.7
200.7
$ .55
$1,548.8
5,335.6
1,228.4
1,948.4
(a) Fiscal 2010 results included $55.9 million, after tax, or $.28 per diluted share related to total charges associated with restructuring activities. Fiscal 2009 results included
$61.7 million, after tax, or $.31 per diluted share related to total charges associated with restructuring activities.
(b) Fiscal 2006 results included $93.0 million, after tax, or $.43 per diluted share in special charges related to our 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 Internal Revenue Service regarding an examination of our consolidated Federal income tax returns for fiscal years 1998
through 2001, and represents the aggregate earnings impact of the settlement through fiscal 2006. The settlement resulted in an increase to our fiscal 2006 income tax
provision and a corresponding decrease in fiscal 2006 net earnings of approximately $46 million, or approximately $.21 per diluted common share. During the fourth
quarter of fiscal 2006, we completed the repatriation of foreign earnings through intercompany dividends under the provisions of the American Jobs Creation Act of 2004
(the “AJCA”). In connection with the repatriation, we 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 our initial tax charge of $35 million recorded in fiscal 2005. The tax settlement, coupled with the AJCA
favorable tax adjustment, resulted in a net increase to our fiscal 2006 income tax provision and a corresponding decrease in fiscal 2006 net earnings of approximately
$35 million, or approximately $.16 per diluted common share.
(c) In November 2008, we issued and sold $300.0 million of 7.75% Senior Notes due November 1, 2013 in a public offering. We used the net proceeds of this offering to
repay then-outstanding commercial paper balances upon their maturity. In May 2007, we issued and sold $300.0 million of 5.55% Senior Notes due May 15, 2017 and
$300.0 million of 6.00% Senior Notes due May 15, 2037 in a public offering. We used the net proceeds of this offering to repay long-term commercial paper, which was
used to fund our accelerated stock repurchase program, and to pay transaction fees and expenses related to this offering.
(d) On May 24, 2010, we completed a cash tender offer for $130.0 million principal amount of our 2012 Senior Notes at a price of 108.500% of the principal amount and
for $69.9 million principal amount of our 2013 Senior Notes at a tender price of 118.813% of the principal amount. During the fourth quarter of fiscal 2010, we recorded a
pre-tax expense on the extinguishment of debt of $27.3 million representing the tender premium, the pro-rata write-off of unamortized terminated interest rate swap,
issuance costs and debt discount, and tender offer costs associated with both series of notes.
(e) In April 2006, we completed the sale of certain assets and operations of the reporting unit that marketed and sold Stila brand products. As a result, all consolidated
statements of earnings information for all periods presented have been restated for comparative purposes to reflect those reporting units as discontinued operations.
(f) During fiscal 2007, we repurchased 22,461,642 shares of our outstanding common stock, of which 15,960,842 shares were purchased for $750.0 million through an
accelerated stock repurchase program with a financial counterparty.
SELECTED FINANCIAL DATA