Estee Lauder 2011 Annual Report Download - page 129

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THE EST{E LAUDER COMPANIES INC. 127
amount of material, nonrecurring pro forma adjustments
directly attributable to the business combination included
in the reported pro forma revenue and earnings. This
guidance becomes effective prospectively for business
combinations for which the acquisition date is on or after
the first day of the Company’s fiscal 2012. This disclosure-
only guidance will not have a material impact on the
Company’s results of operations, financial position or
cash flows.
In January 2010, the FASB issued authoritative guid-
ance that will require entities to make new disclosures
about recurring or nonrecurring fair-value measurements
of assets and liabilities. The Company adopted the new
guidance in its fiscal 2010 third quarter, except for certain
detailed recurring Level 3 disclosures, which are effective
for the Company’s fiscal 2012 first quarter. The Company
currently does not have any recurring Level 3 assets
or liabilities.
NOTE 3
—
INVENTORY AND
PROMOTIONAL MERCHANDISE
JUNE 30 2011 2010
(In millions)
Inventory and promotional
merchandise, net consists of:
Raw materials $230.2 $206.0
Work in process 93.6 78.6
Finished goods 475.4 377.8
Promotional merchandise 196.4 164.2
$995.6 $826.6
NOTE 4
—
PROPERTY, PLANT AND EQUIPMENT
JUNE 30 2011 2010
(In millions)
Asset (Useful Life)
Land $ 15.0 $ 14.3
Buildings and improvements
(10 to 40 years) 195.5 172.5
Machinery and equipment
(3 to 10 years) 635.3 609.5
Computer hardware and software
(4 to 10 years) 707.1 565.4
Furniture and fixtures
(5 to 10 years) 93.9 82.1
Leasehold improvements 1,215.3 1,081.2
2,862.1 2,525.0
Less accumulated depreciation
and amortization 1,719.0 1,501.4
$1,143.1 $1,023.6
The cost of assets related to projects in progress of $183.5
million and $160.4 million as of June 30, 2011 and 2010,
respectively, is included in their respective asset catego-
ries above. Depreciation and amortization of property,
plant and equipment was $283.5 million, $251.8 million
and $240.2 million in fiscal 2011, 2010 and 2009,
respectively. Depreciation and amortization related to the
Company’s manufacturing process is included in cost of
sales and all other depreciation and amortization is
included in selling, general and administrative expenses in
the accompanying consolidated statements of earnings.
NOTE 5
—
GOODWILL AND OTHER
INTANGIBLE ASSETS
On July 1, 2010, the Company acquired Smashbox Beauty
Cosmetics (“Smashbox”) which included the addition of
goodwill of approximately $140 million, amortizable
intangible assets of approximately $61 million (with a
weighted-average amortization period of 9 years) and
non-amortizable intangible assets of approximately $77
million related to the Company’s makeup business.