Estee Lauder 2008 Annual Report Download - page 94

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92 THE EST{E LAUDER COMPANIES INC.
million principal and unamortized debt discount of $2.5
million. The 2033 Senior Notes, when issued in Septem-
ber 2003, were priced at 98.645% with a yield of 5.846%.
Interest payments are required to be made semi-annually
on April 15 and October 15. In May 2003, in anticipation
of the issuance of the 5.75% Senior Notes, the Company
entered into a series of treasury lock agreements on a
notional amount totaling $195.0 million at a weighted
average all-in rate of 4.53%. The treasury lock agreements
were settled upon the issuance of the new debt and the
Company received a payment of $15.0 million that will be
amortized against interest expense over the life of the
2033 Senior Notes. As a result of the treasury lock agree-
ments, the debt discount and debt issuance costs, the
effective interest rate on the 2033 Senior Notes will be
5.395% over the life of the debt.
As of June 30, 2008, the Company had outstanding
$310.4 million of 2017 Senior Notes consisting of $300.0
million principal, an unamortized debt discount of $0.4
million, and a $10.8 million adjustment to refl ect the fair
value of outstanding interest rate swaps. The 2017 Senior
As of June 30, 2008, the Company had outstanding
$296.2 million of 2037 Senior Notes consisting of $300.0
million principal and unamortized debt discount of $3.8
million. The 2037 Senior Notes, when issued in May 2007,
were priced at 98.722% with a yield of 6.093%. Interest
payments are required to be made semi-annually on May
15 and November 15. In April 2007, in anticipation of the
issuance of the 2037 Senior Notes, the Company entered
into a series of forward-starting interest rate swap agree-
ments on a notional amount totaling $210.0 million at a
weighted average all-in rate of 5.45%. The forward- starting
interest rate swap agreements were settled upon the issu-
ance of the new debt and the Company recognized a loss
in other comprehensive income of $0.9 million that will
be amortized to interest expense over the life of the 2037
Senior Notes. As a result of the forward-starting interest
rate swap agreements, the debt discount and debt issu-
ance costs, the effective interest rate on the 2037 Senior
Notes will be 6.181% over the life of the debt.
As of June 30, 2008, the Company had outstanding
$197.5 million of 2033 Senior Notes consisting of $200.0
NOTE 11
—
DEBT
The Company’s short-term and long-term debt and available fi nancing consist of the following:
Available fi nancing at June 30
Debt at June 30 Committed Uncommitted
2008 2007 2008 2007 2008 2007
($ in millions)
6.00% Senior Notes, due May 15, 2037
(“2037 Senior Notes”) $ 296.2 $ 296.2 $— $— $— $—
5.75% Senior Notes, due October 15, 2033
(“2033 Senior Notes”) 197.5 197.4 — — — —
5.55% Senior Notes, due May 15, 2017
(“2017 Senior Notes”) 310.4 290.9 — — — —
6.00% Senior Notes, due January 15, 2012
(“2012 Senior Notes”) 242.0 239.7 — — — —
$13.5 million promissory note due
August 31, 2012 15.7 — — — — —
$7.0 million promissory note due July 31, 2009 7.4 — — — — —
Commercial paper 83.9 26.5 — — 666.1 723.5
Turkish lira overdraft borrowing facility 13.1 9.4 — — — —
Loan participation notes — — — — 150.0 150.0
Japanese yen revolving credit facility — — 28.5 24.3 — —
Other long-term borrowings 9.0 3.9 — — — —
Other short-term borrowings 21.7 24.5 — — 181.4 150.0
Revolving credit facility — — 750.0 750.0 — —
1,196.9 1,088.5 $778.5 $774.3 $997.5 $1,023.5
Less short-term debt including current maturities (118.7) (60.4)
$1,078.2 $1,028.1