Estee Lauder 2011 Annual Report Download - page 137

THE EST{E LAUDER COMPANIES INC. 135
pending appeal in the Spanish courts, based on the
decision of the National Appellate Court, management
believes it is not more-likely-than-not that the subsidiary
will be successful in its appeal to the Spain Supreme
Court. Accordingly, the Company expects to establish a
reserve during the first quarter of fiscal 2012 which would
result in an increase to the provision for income tax equal
to the $4.0 million exposure, net of tax.
Notwithstanding the matter before the Spanish courts,
during the first quarter of fiscal 2011, the Company
reached a formal settlement with the Spanish tax author-
ity regarding an examination of the fiscal 2005 through
calendar year 2007 tax period. The settlement did not
have a material impact on the Company’s consolidated
financial statements.
During fiscal 2011, the Company concluded various
state, local and foreign income tax audits and examina-
tions while several other matters, including those noted
above, were initiated or remained pending. On the basis
of the information available in this regard as of June 30,
2011, it is reasonably possible that the total amount of
unrecognized tax benefits could decrease in a range of
$15 million to $25 million within 12 months as a result of
projected resolutions of global tax examinations and con-
troversies and a potential lapse of the applicable statutes
of limitations.
The tax years subject to examination vary depending
on the tax jurisdiction. As of June 30, 2011, the following
tax years remain subject to examination by the major tax
jurisdictions indicated:
Major Jurisdiction Open Fiscal Years
Belgium 2007–2011
Canada 2001–2011
China 2007–2011
France 2006–2011
Germany 1999–2002, 2004–2011
Hong Kong 2005–2011
Japan 2006–2011
Korea 2009–2011
Russia 2010–2011
Spain 1999–2002, 2008–2011
Switzerland 2009–2011
United Kingdom 2010–2011
United States 2009–2011
State of California 2002–2011
State of New York 2010–2011
The Company is also subject to income tax examinations
in numerous other state, local and foreign jurisdictions.
The Company believes that its tax reserves are adequate
for all years subject to examination.
NOTE 9 — OTHER ACCRUED LIABILITIES
Other accrued liabilities consist of the following:
JUNE 30 2011 2010
(In millions)
Advertising, merchandising
and sampling $ 401.9 $ 373.5
Employee compensation 422.4 366.3
Payroll and other taxes 125.1 103.6
Restructuring 28.6 25.4
Other 318.3 249.2
$1,296.3 $1,118.0
NOTE 10 — DEBT
The Company’s short-term and long-term debt and available financing consist of the following:
Available financing
Debt at June 30 at June 30, 2011
2011 2010 Committed Uncommitted
($ in millions)
6.00% Senior Notes, due May 15, 2037 (“2037 Senior Notes”) $ 296.4 $ 296.3 $— $—
5.75% Senior Notes, due October 15, 2033 (“2033 Senior Notes”) 197.7 197.6 — —
5.55% Senior Notes, due May 15, 2017 (“2017 Senior Notes”) 341.5 338.3 — —
7.75% Senior Notes, due November 1, 2013 (“2013 Senior Notes”) 230.0 230.0 — —
6.00% Senior Notes, due January 15, 2012 (“2012 Senior Notes”) 119.4 118.3 — —
Commercial paper — — — 750.0
Loan participation notes — — — 150.0
March 2012 Japanese yen revolving credit facility — — 18.7 —
Other long-term borrowings 14.5 17.2 — —
Other current borrowings 18.6 30.7 — 194.8
Revolving credit facility — — 750.0 —
1,218.1 1,228.4 $768.7 $1,094.8
Less current debt including current maturities (138.0) (23.4)
$1,080.1 $1,205.0