Estee Lauder 2009 Annual Report Download - page 153

Of the $1.5 million, net of tax, derivative instrument gain
recorded in AOCI at June 30, 2009, $8.7 million, net of
tax, related to the October 2003 gain from the settlement
of the treasury lock agreements upon the issuance of the
Company’s 5.75% Senior Notes due October 2033, which
is being reclassifi ed to earnings as an offset to interest
expense over the life of the debt. Partially offsetting this
gain was $0.5 million, net of tax, related to a loss from the
settlement of a series of forward-starting interest rate
swap agreements upon the issuance of the Company’s
6.00% Senior Notes due May 2037, which will be reclassi-
fi ed to earnings as an addition to interest expense over
the life of the debt. Also partially offsetting the net deriva-
tive instrument gain recorded in OCI was $6.7 million in
losses, net of tax, related to foreign currency forward and
option contracts which the Company will reclassify to
earnings during the next twelve months.
Refer to Note 13 for the discussion regarding the net
pension and post-retirement adjustments.
NOTE 19 — STATEMENT OF CASH FLOWS
Supplemental cash fl ow information for fi scal 2009, 2008
and 2007 is as follows:
2009 2008 2007
(In millions)
Cash:
Cash paid during the year
for interest $ 77.2 $ 74.1 $ 44.6
Cash paid during the year
for income taxes $230.2 $249.9 $199.6
Non-cash investing and
fi nancing activities:
Long-term debt issued upon
acquisition of business $— $ 23.9 $ —
Incremental tax benefi t from
the exercise of stock options $ (7.8) $ 10.9 $ 16.0
Change in liability associated
with acquisition of business $ 5.9 $ 8.3 $ 2.1
Capital lease obligations
incurred $ 15.5 $ 9.7 $ 5.1
Accrued dividend equivalents $ 0.1 $ 0.2 $ 0.2
Interest rate swap derivative
mark to market $ 13.6 $ 19.5 $ 0.6
NOTE 20 — SEGMENT DATA AND
RELATED INFORMATION
Reportable operating segments include components of
an enterprise about which separate fi nancial information
is available that is evaluated regularly by the chief operat-
ing decision maker (the “Chief Executive”) in deciding
how to allocate resources and in assessing performance.
As a result of the similarities in the manufacturing, market-
ing and distribution processes for all of the Company’s
products, much of the information provided in the con-
solidated fi nancial statements is similar to, or the same as,
that reviewed on a regular basis by the Chief Executive.
Although the Company operates in one business segment,
beauty products, management also evaluates perfor-
mance on a product category basis.
While the Company’s results of operations are also
reviewed on a consolidated basis, the Chief Executive
reviews data segmented on a basis that facilitates
comparison to industry statistics. Accordingly, net sales,
depreciation and amortization, and operating income are
available with respect to the manufacture and distribution
of skin care, makeup, fragrance, hair care and other prod-
ucts. These product categories meet the defi nition of
operating segments and, accordingly, additional fi nancial
data are provided below. The “other” segment includes
the sales and related results of ancillary products and
services that do not fi t the defi nition of skin care, makeup,
fragrance and hair care.
The Company evaluates segment performance based
upon operating income, which represents earnings before
income taxes, minority interest, net interest expense and
discontinued operations. The accounting policies for the
Company’s reportable segments are the same as those
described in the summary of significant accounting
policies, except for depreciation and amortization charges,
which are allocated, primarily, based upon net sales. The
assets and liabilities of the Company are managed
centrally and are reported internally in the same manner
as the consolidated fi nancial statements; thus, no addi-
tional information is produced for the Chief Executive or
included herein.
152 THE EST{E LAUDER COMPANIES INC.