Estee Lauder 2015 Annual Report Download - page 80

THE EST{E LAUDER COMPANIES INC. 77
payments, and an increase in accounts payable, primarily
due to the timing of payments. These changes were
partially offset by an increase in accounts receivable,
which primarily reflected accelerated orders in connec-
tion with our July 2014 SMI implementation.
Net cash used for investing activities was $1,616.2 mil-
lion, $511.6 million and $465.5 million in fiscal 2015, 2014
and 2013, respectively. The fiscal 2015 increase as com-
pared with fiscal 2014 primarily reflected purchases of
investments in connection with the implementation of our
cash investment strategy, as previously discussed. Also
contributing to the increase was cash paid in connection
with the acquisitions of RODIN olio lusso, Le Labo,
Editions de Parfums Frédéric Malle and GLAMGLOW.
Partially offsetting cash used for investing activities were
proceeds from the disposition of investments and, to a
lesser extent, lower capital expenditure activity. The
increase in cash flows used for investing activities during
fiscal 2014 as compared with fiscal 2013 primarily
reflected higher capital expenditure activity related to
leasehold improvements and counters.
Net cash used for financing activities was $894.8 mil-
lion, $856.9 million and $611.5 million in fiscal 2015, 2014
and 2013, respectively. The fiscal 2015 increase in cash
used for financing activities as compared with fiscal 2014
primarily reflected an increase in treasury stock purchases
and higher dividend payments, partially offset by the pro-
ceeds from the issuance of the 2045 Senior Notes. The
increase in cash used for financing activities during fiscal
2014 as compared with fiscal 2013 primarily reflected an
increase in treasury stock purchases which were partially
offset by lower dividend payments that resulted from the
transition to quarterly dividends in the third quarter of fis-
cal 2013 and the final annual dividend payment made that
year. In addition, fiscal 2013 reflected the proceeds from
the issuance of the 2022 Senior Notes and 2042 Senior
Notes, which was partially offset by the redemption of the
2013 Senior Notes and repayment of commercial paper.
Dividends
For a summary of quarterly cash dividends declared per
share on our Class A and Class B Common Stock during
the year ended June 30, 2015, see “Note 15 — Common
Stock” of Notes to Consolidated Financial Statements.
Pension and Post-retirement Plan Funding
Several factors influence the annual funding requirements
for our pension plans. For the U.S. Qualified Plan, we seek
to maintain appropriate funded percentages. For any
future contributions to the U.S. Qualified Plan, we would
seek to contribute an amount or amounts that would not
be less than the minimum required by the Employee
Retirement Income Security Act of 1974, as amended,
(“ERISA”) and subsequent pension legislation, and would
not be more than the maximum amount deductible for
income tax purposes. For each international plan, our
funding policies are determined by local laws and regula-
tions. In addition, amounts necessary to fund future
obligations under these plans could vary depending on
estimated assumptions as detailed in “Management’s
Discussion and Analysis of Financial Condition and Results
of Operations — Critical Accounting Policies and Estimates.”
The effect of our pension plan funding on future operat-
ing results will depend on economic conditions, employee
demographics, mortality rates, the number of participants
electing to take lump-sum distributions, investment per-
formance and funding decisions.
For the U.S. Qualified Plan, we maintain an investment
strategy of matching the duration of a substantial portion
of the plan assets with the duration of the underlying plan
liabilities. This strategy assists us in maintaining our overall
funded ratio. During fiscal 2015, we made a cash contri-
bution to the U.S. Qualified Plan of $25.0 million. For fis-
cal 2015 and 2014, we met or exceeded all contribution
requirements under ERISA regulations for the U.S. Quali-
fied Plan. As we continue to monitor the funded status,
we may decide to make cash contributions to the U.S.
Qualified Plan or our post-retirement medical plan in the
United States during fiscal 2016.
For fiscal 2015 and 2014, we made benefit payments
under our non-qualified domestic noncontributory pen-
sion plan of $4.9 million and $7.2 million, respectively.
We expect to make benefit payments under this plan
during fiscal 2016 of approximately $15 million. For fiscal
2015 and 2014, we made benefit payments under our
post-retirement plans of $6.3 million and $6.2 million,
respectively. We expect to make benefit payments under
these plans during fiscal 2016 of approximately $6 million.
For fiscal 2015 and 2014, we made cash contributions to
our international defined benefit pension plans of $22.8
million and $27.9 million, respectively. We expect to make
contributions under these plans during fiscal 2016 of
approximately $23 million.
Commitments and Contingencies
Certain of our business acquisition agreements include
contingent consideration or “earn-out” provisions. These
provisions generally require that we pay to the seller or
sellers of the business additional amounts based on the
performance of the acquired business. Since the size
of each payment depends upon performance of the
acquired business, we do not expect that such payments
will have a material adverse impact on our future results of
operations or financial condition.