Estee Lauder 2013 Annual Report Download - page 134

resulting from the timing and level of tax payments. Cash
flows from operating activities increased in fiscal 2012 as
compared with fiscal 2011 primarily driven by an increase
in net earnings, favorable levels of accounts payable,
primarily due to the timing of payments, and a decrease in
the levels of inventory. These improvements were partially
offset by the change in other liabilities, primarily due to
the timing of payments and costs related to employee
compensation, advertising, merchandising and sampling,
and payroll and other taxes, as well as an increase in
accounts receivable balances primarily due to the timing
of shipments.
Net cash used for investing activities was $465.5 mil-
lion, $428.3 million and $606.9 million in fiscal 2013,
2012 and 2011, respectively. The increase in cash flows
used for investing activities as compared with fiscal 2012
primarily reflected higher capital expenditure activity in
the current year related to counters and leasehold
improvements. The decrease in cash flows used for invest-
ing activities during fiscal 2012 as compared with fiscal
2011 primarily reflected a favorable comparison with the
fiscal 2011 acquisition of Smashbox Cosmetics, partially
offset by an increase in capital expenditures for counters
and leasehold improvements.
Net cash used for financing activities was $611.5 mil-
lion, $585.1 million and $313.1 million in fiscal 2013, 2012
and 2011, respectively. The increase in cash used for
financing activities as compared with fiscal 2012 primarily
reflected the repayment of outstanding commercial paper
during the current year, higher dividends paid as a result
of the increase in the annual dividend rate and transition
to a quarterly dividend payout schedule, and higher
redemptions of long-term debt during the current year,
partially offset by the proceeds from the issuance of the
2022 Senior Notes and 2042 Senior Notes in August
2012 and lower treasury stock repurchases. The change in
net cash used for financing activities in fiscal 2012 as com-
pared with fiscal 2011 primarily reflected an increase in
treasury stock purchases, lower net proceeds from
employee stock transactions and an increase in the pay-
ment of dividends during fiscal 2012 as a result of an
increase in the annual dividend rate. The repayment of
the 2012 Senior Notes during fiscal 2012 was offset by
proceeds from the issuance of short-term commercial
paper. Subsequent to June 30, 2013, we purchased
approximately 0.6 million additional shares of Class A
Common Stock for $41.8 million pursuant to our share
repurchase program.
132 THE EST{E LAUDER COMPANIES INC.
approximately $1 million to establish the Facility which
are being amortized over the term of the Facility. The
Facility has an annual fee of $0.7 million, payable quar-
terly, based on our current credit ratings. The Facility also
contains a cross-default provision whereby a failure to pay
other material financial obligations in excess of $100.0
million (after grace periods and absent a waiver from the
lenders) would result in an event of default and the accel-
eration of the maturity of any outstanding debt under this
facility. At June 30, 2013, no borrowings were outstanding
under this agreement.
We have a fixed rate promissory note agreement with
a financial institution pursuant to which we may borrow
up to $150.0 million in the form of loan participation
notes through one of our subsidiaries in Europe. The inter-
est rate on borrowings under this agreement is at an all-in
fixed rate determined by the lender and agreed to by us at
the date of each borrowing. At June 30, 2013, no borrow-
ings were outstanding under this agreement. Debt
issuance costs incurred related to this agreement were
de minimis.
We have borrowing agreements with two financial
institutions pursuant to which our subsidiary in Turkey
may borrow up to 50.0 million Turkish lira ($26.0 million
at the exchange rate at June 30, 2013). The interest rate
on borrowings under these agreements was approxi-
mately 7%. There were no debt issuance costs incurred
related to these agreements. The outstanding balance at
June 30, 2013 was 14.1 million Turkish lira ($7.4 million at
the exchange rate at June 30, 2013) and is classified as
current debt in our consolidated balance sheet.
Total debt as a percent of total capitalization (exclud-
ing noncontrolling interests) was 29% at June 30, 2013
and 32% at June 30, 2012.
Cash Flows
Net cash provided by operating activities was $1,226.3
million, $1,126.7 million and $1,027.0 million in fiscal
2013, 2012 and 2011, respectively. The increase in cash
flows from operating activities as compared with fiscal
2012 was primarily driven by an increase in net earnings,
a decrease in pension and post-retirement benefit contri-
butions and a favorable change in accounts receivable
due to the timing of shipments and collections. These
improvements were partially offset by an increase in the
levels of inventory, primarily to maintain acceptable
service levels in line with forecasted sales activity, as well
as for the remaining safety stock for the SMI implementa-
tion. Also offsetting these improvements were a change
in accounts payable, primarily due to the timing of
payments, and a decrease in accrued income taxes,