Estee Lauder 2002 Annual Report Download - page 71

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THEEST{E LAUDER COMPANIES INC. 70
Other than
Pension Plans Pension Plans
2002 2001 2000 2002 2001 2000 2002 2001 2000
Weighted-average assumptions
Pre-retirement discount rate 7.00% 7.50% 7.85% 2.75– 3.00– 3.00– 7.00% 7.50% 7.85%
7.00% 7.25% 7.50%
Postretirement discount rate 5.75% 6.00% 6.25% ——————
Expected return on assets 9.00% 9.00% 9.00% 4.50– 5.00– 5.00– N/A N/A N/A
8.25% 8.50% 8.25%
Rate of compensation increase 4.50– 5.00– 5.50– 1.75– 2.00– 2.00– N/A N/A N/A
11.00% 11.50% 12.00% 4.00% 5.50% 6.50%
Components of net periodic
benefit cost (In millions)
Service cost, net $13.5 $ 12.3 $ 10.8 $8.0 $ 8.0 $ 8.6 $1.8 $ 1.9 $1.9
Interest cost 20.6 19.7 16.9 7.2 6.7 6.3 2.9 3.0 2.8
Expected return on assets (17.3) (16.2) (13.5) (8.3) (7.4) (6.6) ———
Amortization of:
Transition (asset) obligation (1.5) (1.4) (1.4) 0.2 0.2 0.3 ———
Prior service cost 0.4 0.4 0.4 0.2 0.2 0.3 ———
Actuarial loss (gain) 2.6 1.1 1.3 1.0 0.9 1.2 (0.4) (0.2) —
Other —— 0.8 ——————
Net periodic benefit cost $ 18.3 $ 15.9 $ 15.3 $8.3 $ 8.6 $10.1 $4.3 $ 4.7 $4.7
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-
percentage-point change in assumed health care cost trend rates for fiscal 2002 would have had the following effects:
One-Percentage-Point Increase One-Percentage-Point Decrease
(In millions)
Effect on total service and interest costs $0.6 $(0.5)
Effect on postretirement benefit obligations $4.8 $(4.6)
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the Company’s pension
plans at June 30 are as follows:
Pension Plans
2002 2001 2002 2001 2002 2001
(In millions)
Projected Benefit Obligation $244.7 $216.6 $65.6 $63.8 $154.7 $131.5
Accumulated Benefit Obligation 191.5 165.1 47.3 46.0 127.9 107.8
Fair Value of Plan Assets 201.8 179.7 ——116.3 104.6
InternationalRestoration
Retirement
Growth Account
PostretirementInternationalU.S.
International pension plans with accumulated benefit obli-
gations in excess of the plans’ assets had aggregate pro-
jected benefit obligations of $113.3 million and $92.9
million, aggregate accumulated benefit obligations of
$97.2 million and $79.0 million and aggregate fair value of
plan assets of $66.3 million and $58.0 million at June 30,
2002 and 2001, respectively.
401(k) Savings Plan (U.S.)
The Company’s 401(k) Savings Plan (“Savings Plan”) is a
contributory defined contribution plan covering substan-
tially all regular U.S. employees who have completed the
hours and service requirements, as defined by the plan
document.Effective January 1, 2002, regular full-time
employees are eligible to participate in the Plan on the
first day of the second month following their date of hire.
The Savings Plan is subject to the applicable provisions