Estee Lauder 2008 Annual Report Download - page 103

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The target asset allocation policy was set to maximize
returns with consideration to the long-term nature of the
obligations and maintaining a lower level of overall
volatility through the allocation to fi xed income. During
the year, the asset allocation is reviewed for adherence
to the target policy and is rebalanced periodically towards
the target weights.
401(k) Savings Plan (U.S.)
The Company’s 401(k) Savings Plan (“Savings Plan”) is a
contributory defi ned contribution plan covering substan-
tially all regular U.S. employees who have completed the
hours and service requirements, as defi ned by the plan
document. Regular full-time employees are eligible to par-
ticipate in the Savings Plan thirty days following their date
of hire. The Savings Plan is subject to the applicable provi-
sions of ERISA. The Company matches a portion of the
participant’s contributions after one year of service under
a predetermined formula based on the participant’s con-
tribution level. The Company’s contributions were approx-
imately $18.7 million, $13.7 million and $10.6 million for
the fi scal years ended June 30, 2008, 2007 and 2006,
respectively. Shares of the Company’s Class A Common
Stock are not an investment option in the Savings Plan
and the Company does not use such shares to match
participants’ contributions.
Deferred Compensation
The Company accrues for deferred compensation and
interest thereon, and for the increase in the value of share
units pursuant to agreements with certain key executives
and outside directors. The amounts included in the
accompanying consolidated balance sheets under these
plans were $67.9 million and $69.6 million as of June 30,
2008 and 2007. The expense for fi scal 2008, 2007 and
2006 was $9.2 million, $8.5 million and $11.6 million,
respectively.
NOTE 14
—
POST-EMPLOYMENT BENEFITS OTHER
THAN TO RETIREES
The Company provides certain post-employment benefi ts
to eligible former or inactive employees and their
dependents during the period subsequent to employment
but prior to retirement. These benefi ts include health
care coverage and severance benefits. The cost of
pro viding these benefi ts is accrued and any incremental
benefi ts were not material to the Company’s consolidated
fi nancial results.
THE EST{E LAUDER COMPANIES INC. 101
Other than
Pension Plans Pension Plans
U.S. International Post-retirement
(In millions)
Expected Cash Flows:
Expected employer contributions for year ending
June 30, 2009 $15.0 $45.9 N/A
Expected benefi t payments for year ending June 30,
2009 33.6 18.7 $4.1
2010 34.2 14.1 4.6
2011 35.0 18.0 5.3
2012 34.5 19.4 5.9
2013 36.1 17.9 6.7
Years 2014–2018 205.9 113.4 43.5
Plan Assets:
Target asset allocation at June 30, 2008
Equity 44% 41% N/A
Debt securities 34% 42% N/A
Other 22% 17% N/A
100% 100% N/A
Actual asset allocation at June 30, 2008
Equity 40% 45% N/A
Debt securities 42% 38% N/A
Other 18% 17% N/A
100% 100% N/A
Actual asset allocation at June 30, 2007
Equity 49% 55% N/A
Debt securities 31% 29% N/A
Other 20% 16% N/A
100% 100% N/A