Estee Lauder 2012 Annual Report Download - page 140

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138 THE EST{E LAUDER COMPANIES INC.
Total Returns and Other Charges Associated with
Restructuring Activities
The following table presents total returns and charges
associated with restructuring and other activities related
to the Program:
YEAR ENDED JUNE 30 2012 2011 2010
(In millions)
Sales returns (included in
Net Sales) $ 2.1 $ 4.6 $15.7
Cost of sales 1.5 5.8 7.9
Restructuring charges 53.6 41.1 48.8
Other charges 6.0 7.9 12.3
Total charges associated with
restructuring activities $63.2 $59.4 $84.7
During fiscal 2012, the Company recorded $2.1 million
reflecting sales returns (less related cost of sales of $0.3
million) and a write-off of inventory of $1.8 million associ-
ated with exiting unprofitable operations.
During fiscal 2011, the Company recorded $4.6 million
reflecting sales returns (less related cost of sales of $1.2
million) and a write-off of inventory of $7.0 million associ-
ated with turnaround operations, primarily related to the
reformulation of Ojon brand products.
During fiscal 2010, the Company recorded $15.7
million reflecting sales returns (less related cost of sales of
$2.5 million) and $10.4 million for the write-off of inven-
tory associated with exiting unprofitable operations,
primarily related to the exit from the global wholesale
distribution of the Prescriptives brand.
Other charges in connection with the implementation
of actions taken under this Program primarily relate to
consulting and other professional services.
NOTE 8
—
INCOME TAXES
The provision for income taxes is comprised of the following:
YEAR ENDED JUNE 30 2012 2011 2010
(In millions)
Current:
Federal $154.5 $127.2 $ 16.0
Foreign 254.1 220.0 205.6
State and local 14.1 (1.0) 9.0
422.7 346.2 230.6
Deferred:
Federal (13.8) (27.8) (16.4)
Foreign (9.0) 2.6 (7.5)
State and local 0.7 0.7 (0.8)
(22.1) (24.5) (24.7)
$400.6 $321.7 $205.9
A reconciliation of the U.S. federal statutory income tax rate to our actual effective tax rate on earnings before income
taxes is as follows:
YEAR ENDED JUNE 30 2012 2011 2010
(In millions)
Provision for income taxes at statutory rate 35.0% 35.0% 35.0%
Increase (decrease) due to:
State and local income taxes, net of federal tax benefit 1.1 0.8 1.5
Taxation of foreign operations (4.2) (2.7) (0.9)
Income tax reserve adjustments (0.8) (1.8) (5.6)
Other, net 0.7 0.1 (0.1)
Effective tax rate 31.8% 31.4% 29.9%