Estee Lauder 2009 Annual Report Download - page 107

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106 THE EST{E LAUDER COMPANIES INC.
additional uncommitted credit facilities, of which $16.3
million was used as of June 30, 2009.
We have an undrawn $750.0 million senior unsecured
revolving credit facility that expires on April 26, 2012. This
facility may be used primarily to provide credit support for
our commercial paper program, to repurchase shares of
our common stock and for general corporate purposes.
Up to the equivalent of $250 million of the credit facility
We have a $750.0 million commercial paper program
under which we may issue commercial paper in the
United States. Our commercial paper is currently rated
A-1 by Standard & Poor’s and P-1 by Moody’s. Our
long-term credit ratings are A with a negative outlook
by Standard & Poor’s and A2 with a negative outlook by
Moody’s. At June 30, 2009, there was no commercial
paper outstanding. We also have $201.4 million in
conditions, and the real or perceived lack of available
credit, we issued $300.0 million of 7.75% Senior Notes
due November 1, 2013 during the second quarter of fi scal
2009. The net proceeds were used to repay then-out-
standing commercial paper balances upon their maturity.
Based on past performance and current expectations,
we believe that cash on hand, cash generated from opera-
tions, available credit lines and access to credit markets
will be adequate to support currently planned business
operations, information systems enhancements, capital
expenditures, potential stock repurchases, commitments
and other contractual obligations on both a near-term and
long-term basis.
The effects of infl ation have not been signifi cant to our
overall operating results in recent years. Generally, we
have been able to introduce new products at higher sell-
ing prices or increase selling prices suffi ciently to offset
cost increases, which have been moderate.
insured by governmental agencies. To mitigate the risk of
uninsured balances, we select fi nancial institutions based
on their credit ratings and fi nancial strength and perform
ongoing evaluations of these institutions to limit our con-
centration risk exposure.
Our business is seasonal in nature and, accordingly,
our working capital needs vary. From time to time, we
may enter into investing and fi nancing transactions that
require additional funding. To the extent that these needs
exceed cash from operations, we could, subject to market
conditions, issue commercial paper, issue long-term debt
securities or borrow under our revolving credit facilities.
During fi scal 2009, we have been able to issue com-
mercial paper in amounts and with terms that we deem
acceptable. We do not anticipate protracted diffi culties in
securing this form of working capital fi nancing. However,
in order to maintain suffi cient cash reserves over a longer
period of time, in light of the current macroeconomic
Debt
At June 30, 2009, our outstanding borrowings were as follows:
Long-term Debt Short-term Debt Total Debt
($ in millions)
6.00% Senior Notes, due May 15, 2037 (“2037 Senior Notes”)(1) $ 296.3 $ — $ 296.3
5.75% Senior Notes, due October 15, 2033 (“2033 Senior Notes”)(2) 197.5 — 197.5
5.55% Senior Notes, due May 15, 2017 (“2017 Senior Notes”)(3) 324.1 — 324.1
7.75% Senior Notes, due November 1, 2013 (“2013 Senior Notes”) (4) 299.8 — 299.8
6.00% Senior Notes, due January 15, 2012 (“2012 Senior Notes”)(5) 244.2 — 244.2
$13.5 million promissory note due August 31, 2012(6) 15.2 — 15.2
$7.0 million promissory note due July 31, 2009(7) — 7.7 7.7
Turkish lira overdraft facility — 12.5 12.5
Other borrowings 10.5 13.6 24.1
$1,387.6 $33.8 $1,421.4
(1) Consists of $300.0 million principal and unamortized debt discount of $3.7 million.
(2) Consists of $200.0 million principal and unamortized debt discount of $2.5 million.
(3) Consists of $300.0 million principal, unamortized debt discount of $0.4 million and a $24.5 million adjustment to refl ect the fair value of
outstanding interest rate swaps.
(4) Consists of $300.0 million principal and unamortized debt discount of $0.2 million.
(5) Consists of $250.0 million principal, unamortized debt discount of $0.3 million and a $5.5 million adjustment to refl ect the remaining termination
value of an interest rate swap that is being amortized to interest expense over the life of the debt.
(6) Consists of $13.5 million face value and unamortized premium of $1.7 million.
(7) Consists of $7.0 million face value and capitalized interest of $0.7 million.