Estee Lauder 2011 Annual Report Download - page 133

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THE EST{E LAUDER COMPANIES INC. 131
Total Returns and Charges Associated with
Restructuring Activities
The following table presents total returns and charges asso-
ciated with restructuring activities related to the Program:
YEAR ENDED JUNE 30 2011 2010 2009
(In millions)
Sales returns (included in
Net Sales) $ 4.6 $15.7 $ 8.1
Cost of sales 5.8 7.9 6.8
Restructuring charges 41.1 48.8 70.3
Other special charges 7.9 12.3 6.5
Total returns and charges
associated with
restructuring activities $59.4 $84.7 $91.7
During fiscal 2011, the Company recorded $4.6 million
reflecting sales returns (less related cost of sales of $1.2
million) and a write-off of inventory of $7.0 million associ-
ated with turnaround operations, primarily related to the
reformulation of Ojon brand products.
During fiscal 2010, the Company recorded $15.7
million reflecting sales returns (less related cost of sales of
$2.5 million) and $10.4 million for the write-off of inven-
tory associated with exiting unprofitable operations,
primarily related to the exit from the global wholesale
distribution of the Prescriptives brand.
During fiscal 2009, the Company recorded $8.1 million
reflecting sales returns (less related cost of sales of $1.2
million) and a write-off of inventory of $8.0 million associ-
ated with exiting unprofitable operations.
Other special charges in connection with the imple-
mentation of actions taken under this Program primarily
relate to consulting and other professional services.
Restructuring Charges
The following table presents aggregate restructuring charges related to the Program:
Employee-Related Asset Contract
Costs Write-offs Terminations Other Exit Costs Total
(In millions)
Fiscal 2009 $ 60.9 $ 4.2 $ 3.4 $ 1.8 $ 70.3
Fiscal 2010 29.3 11.0 2.3 6.2 48.8
Fiscal 2011 34.6 2.4 3.0 1.1 41.1
Charges recorded through
June 30, 2011 $124.8 $ 17.6 $ 8.7 $ 9.1 $160.2
The following table presents accrued restructuring charges and the related activity under the Program:
Employee-Related Asset Contract
Costs Write-offs Terminations Other Exit Costs Total
(In millions)
Charges $ 60.9 $ 4.2 $ 3.4 $ 1.8 $ 70.3
Cash payments (7.5) — (0.5) (1.6) (9.6)
Non-cash write-offs — (4.2) — — (4.2)
Translation adjustments 0.6 — — — 0.6
Other adjustments (2.4) — — — (2.4)
Balance at June 30, 2009 51.6 — 2.9 0.2 54.7
Charges 29.3 11.0 2.3 6.2 48.8
Cash payments (49.5) — (5.1) (6.0) (60.6)
Non-cash write-offs — (11.0) — — (11.0)
Translation adjustments (0.8) — — — (0.8)
Balance at June 30, 2010 30.6 — 0.1 0.4 31.1
Charges 34.6 2.4 3.0 1.1 41.1
Cash payments (30.6) — (2.4) (1.4) (34.4)
Non-cash write-offs — (2.4) — — (2.4)
Translation adjustments 1.2 — (0.1) 0.1 1.2
Balance at June 30, 2011 $ 35.8 $ — $ 0.6 $ 0.2 $ 36.6
Accrued restructuring charges at June 30, 2011 are expected to result in cash expenditures funded from cash provided
by operations of approximately $29 million, $6 million and $2 million in fiscal 2012, 2013 and 2014, respectively.