Estee Lauder 2013 Annual Report Download - page 151

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THE EST{E LAUDER COMPANIES INC. 149
NOTE 3
—
INVENTORY AND
PROMOTIONAL MERCHANDISE
JUNE 30 2013 2012
(In millions)
Inventory and promotional
merchandise, net consists of:
Raw materials $ 274.2 $220.7
Work in process 116.8 98.0
Finished goods 510.9 473.9
Promotional merchandise 212.0 191.0
$1,113.9 $983.6
20
1
3
$
274.2
116
.
8
510.
9
2
1
2.0
$
1
,
113.
9
NOTE 4
—
PROPERTY, PLANT AND EQUIPMENT
JUNE 30 2013 2012
(In millions)
Asset (Useful Life)
Land $ 14.7 $ 14.6
Buildings and improvements
(10 to 40 years) 195.4 188.8
Machinery and equipment
(3 to 10 years) 647.9 620.9
Computer hardware and software
(4 to 10 years) 948.4 850.4
Furniture and fixtures
(5 to 10 years) 71.6 66.4
Leasehold improvements 1,349.6 1,227.3
3,227.6 2,968.4
Less accumulated depreciation
and amortization 1,876.9 1,736.6
$1,350.7 $1,231.8
2
013
$
14.
7
1
9
5.
4
647.
9
9
48.
4
71
.
6
1,
349.
6
3
,
227.
6
1
,
876.
9
$
1,350.
7
The cost of assets related to projects in progress of $178.7
million and $231.6 million as of June 30, 2013 and 2012,
respectively, is included in their respective asset catego-
ries above. Depreciation and amortization of property,
plant and equipment was $329.8 million, $286.9 million
and $283.5 million in fiscal 2013, 2012 and 2011, respec-
tively. 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.
that limits the scope of these disclosures to recognized
derivative instruments, repurchase agreements and
reverse repurchase agreements, and securities borrowing
and lending transactions to the extent they are offset in
the balance sheet or subject to an enforceable master net-
ting arrangement or similar agreement. This disclosure-
only guidance becomes effective for the Company’s fiscal
2014 first quarter, with retrospective application required.
The Company currently does not hold any financial or
derivative instruments within the scope of this guidance
that are offset in its consolidated balance sheets or are
subject to an enforceable master netting arrangement.
The adoption of this guidance is not expected to have an
impact on the Company’s results of operations, financial
position or cash flows, but may require certain additional
disclosures if the Company enters into additional arrange-
ments that fall under the scope of this guidance.
Out-of-period Adjustments
During the year ended June 30, 2013, the Company
identified and recorded out-of-period adjustments
related to the fiscal years ended June 30, 2008 through
June 30, 2012.
During the three months ended September 30, 2012,
these out-of-period adjustments resulted in a net decrease
in earnings before taxes of $5.9 million, a decrease in net
earnings of $7.4 million and a decrease in diluted net
earnings per common share of $.02. These out-of-period
adjustments resulted from an understatement of foreign
transactional taxes (no impact on the provision for income
taxes), an overstatement of accounts payable balances
and an overstatement of prepaid asset balances.
During the three months ended December 31, 2012,
the Company recorded an additional out-of-period adjust-
ment related to the overstatement of accounts payable
balances. This adjustment resulted in an increase in earn-
ings before taxes of $13.6 million, an increase in net earn-
ings of $9.1 million and an increase in diluted net earnings
per common share of $.02 for the three months ended
December 31, 2012.
The impact of these adjustments for the year ended
June 30, 2013 is an increase in earnings before taxes of
$7.7 million, an increase in net earnings of $1.7 million
and no change in diluted net earnings per common share.
Individually and in the aggregate, these out-of-period
adjustments did not have a material impact on the Com-
pany’s consolidated financial statements for the year
ended June 30, 2013, and the related items were not
material to any previously issued consolidated financial
statements.