Estee Lauder 2012 Annual Report Download - page 139

Download and view the complete annual report

Please find page 139 of the 2012 Estee Lauder annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 174

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174

THE EST{E LAUDER COMPANIES INC. 137
•฀฀
Turnaround or Exit Unprofitable Operations—To improve
the profitability in certain of the Company’s brands and
regions, the Company has selectively exited certain
channels of distribution, categories and markets, and has
made changes to turnaround others. This included
the exit from the global wholesale distribution of the
Company’s Prescriptives brand, the reformulation of
Ojon brand products and the exit from the global distri-
bution of Sean John products. In connection with these
activities, the Company incurred charges related to
product returns, inventory write-offs, reduction of work-
force and termination of contracts.
•฀฀Outsourcing — In order to balance the growing need for
information technology support with the Company’s
efforts to provide the most efficient and cost effective
solutions, the Company continued the outsourcing of
certain information technology processes. The Company
incurred costs to transition services to outsource pro-
viders and employee-related termination costs.
Restructuring Charges
The following table presents aggregate restructuring charges related to the Program:
Employee-Related Asset Contract
Costs Write-offs Terminations Other Exit Costs Total
(In millions)
Fiscal 2009 $ 60.9 $ 4.2 $ 3.4 $ 1.8 $ 70.3
Fiscal 2010 29.3 11.0 2.3 6.2 48.8
Fiscal 2011 34.6 2.4 3.0 1.1 41.1
Fiscal 2012 37.1 1.7 12.6 2.2 53.6
Charges recorded through
June 30, 2012 $161.9 $19.3 $21.3 $11.3 $213.8
The following table presents accrued restructuring charges and the related activities under the Program:
Employee-Related Asset Contract
Costs Write-offs Terminations Other Exit Costs Total
(In millions)
Charges $ 60.9 $ 4.2 $ 3.4 $ 1.8 $ 70.3
Cash payments (7.5) — (0.5) (1.6) (9.6)
Non-cash write-offs — (4.2) — — (4.2)
Translation adjustments 0.6 — — — 0.6
Other adjustments (2.4) — — — (2.4)
Balance at June 30, 2009 51.6 — 2.9 0.2 54.7
Charges 29.3 11.0 2.3 6.2 48.8
Cash payments (49.5) — (5.1) (6.0) (60.6)
Non-cash write-offs — (11.0) — — (11.0)
Translation adjustments (0.8) — — — (0.8)
Balance at June 30, 2010 30.6 — 0.1 0.4 31.1
Charges 34.6 2.4 3.0 1.1 41.1
Cash payments (30.6) — (2.4) (1.4) (34.4)
Non-cash write-offs — (2.4) — — (2.4)
Translation adjustments 1.2 — (0.1) 0.1 1.2
Balance at June 30, 2011 35.8 — 0.6 0.2 36.6
Charges 37.1 1.7 12.6 2.2 53.6
Cash payments (23.6) — (12.4) (2.0) (38.0)
Non-cash write-offs — (1.7) — — (1.7)
Translation adjustments (1.4) — — 0.1 (1.3)
Balance at June 30, 2012 $ 47.9 $— $ 0.8 $ 0.5 $ 49.2
Accrued restructuring charges at June 30, 2012 are expected to result in cash expenditures funded from cash provided
by operations of approximately $35 million, $12 million and $2 million in fiscal 2013, 2014 and 2015, respectively.