Estee Lauder 2009 Annual Report Download - page 109

million at the exchange rate at June 30, 2009) revolving
credit facility that expires on March 31, 2012. The interest
rates on borrowings under these credit facilities are based
on TIBOR (Tokyo Interbank Offered Rate) plus .45% and
.75%, respectively and the facility fees incurred on
undrawn balances are 15 basis points and 25 basis points,
respectively. At June 30, 2009, no borrowings were out-
standing under these facilities.
Total debt as a percent of total capitalization increased
to 46% at June 30, 2009 from 42% at June 30, 2008, pri-
marily as a result of the issuance of the 7.75% Senior
Notes due 2013, partially offset by the repayment of
outstanding commercial paper balances. Based on our
current plans, we do not expect this change to have a
material adverse impact on our future results of operations
or liquidity on both a near-term and long-term basis.
Cash Flows
Cash and cash equivalents have increased signifi cantly as
compared with the prior year. In light of economic condi-
tions during fi scal 2009, we took a defensive approach to
preserve our liquidity. We issued long-term bonds and
reduced share repurchases.
Net cash provided by operating activities was $696.0
million, $690.1 million and $661.6 million in fi scal 2009,
2008 and 2007, respectively. The increase in operating
cash fl ows in fi scal 2009 as compared with fi scal 2008
primarily refl ected a decrease in inventory, due in part to
ongoing planned reductions in stock-keeping units, as
well as lower accounts receivable as a result of lower sales
and an improvement in days sales outstanding. These
activities were partially offset by lower net earnings and
an increase in income tax receivables as compared with
the prior year, as well as a reduction in cash provided by
certain working capital components, including payments
for accounts payable and other liabilities. The increase in
operating cash fl ows from fi scal 2008 as compared with
fi scal 2007 primarily refl ected a higher level of cash gener-
ated from net earnings before non-cash items such as
depreciation, amortization and stock-based compensa-
tion. Approximately $91 million of the change in deferred
income taxes was offset by a correlative change in non-
current accrued income taxes refl ecting the balance sheet
presentation of unrecognized tax benefi ts. These changes
were partially offset by the timing and level of payments
on trade payables in North America and higher accounts
receivable levels, primarily reflecting significant sales
growth from our international operations, which carry
longer customer payment terms.
Net cash used for investing activities was $339.5 mil-
lion, $478.5 million and $373.8 million in fi scal 2009,
2008 and 2007. The decrease during fi scal 2009 primarily
refl ected lower capital expenditure activity in the current
year and the prior-year acquisition of Ojon Corporation,
partially offset by the current-year acquisitions of AGI and
two Aveda distributors. The increase in cash used for
investing activities during fi scal 2008 as compared with
fi scal 2007 primarily refl ected cash payments related to
the acquisition of Ojon Corporation and the exclusive
rights to sell and distribute Ojon products worldwide, and
to a lesser extent, the acquisition of an Aveda distributor.
Capital expenditures also increased from fi scal 2007 to
fi scal 2008 refl ecting incremental spending for counters
and the higher costs of technology related to our continu-
ing company-wide initiative to upgrade our information
systems.
Cash provided by fi nancing activities was $125.8 mil-
lion in fi scal 2009 and cash used for fi nancing activities
was $78.1 million and $411.6 million in fi scal 2008 and
2007, respectively. The fiscal 2009 increase in cash
provided by fi nancing activities primarily refl ected the
issuance of the $300.0 million Senior Notes due 2013 and
a decrease in treasury stock purchases, partially offset by
repayments of outstanding commercial paper. The fi scal
2008 increase in cash used for financing activities
primarily refl ected higher treasury stock repurchases in
fi scal 2007, which were partially funded by the issuance of
long-term debt. Also contributing to the change in net
cash used for fi nancing activities was an increase in out-
standing commercial paper, partially offset by lower cash
infl ows from stock option exercises.
Dividends
On November 6, 2008, the Board of Directors declared
an annual dividend of $.55 per share on our Class A and
Class B Common Stock, of which an aggregate of $108.4
million was paid on December 17, 2008 to stockholders
of record at the close of business on December 1, 2008.
The annual common stock dividend declared during fi scal
2008 was $.55 per share, of which an aggregate of $106.6
million was paid on December 27, 2007 to stockholders
of record at the close of business on December 7, 2007.
Pension Plan Funding
Several factors infl uence the annual funding requirements
for our pension plans. For the U.S. Qualifi ed Plan, our
funding policy consists of annual contributions at a rate
that provides for future plan benefi ts and maintains appro-
priate funded percentages. Such contribution is not less
than the minimum required by the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), and
subsequent pension legislation, and is not more than the
maximum amount deductible for income tax purposes.
For each international plan, our funding policies are deter-
108 THE EST{E LAUDER COMPANIES INC.