Estee Lauder 2012 Annual Report Download - page 150

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148 THE EST{E LAUDER COMPANIES INC.
NOTE 13
—
PENSION, DEFERRED COMPENSATION
AND POST-RETIREMENT BENEFIT PLANS
The Company maintains pension plans covering substan-
tially all of its full-time employees for its U.S. operations
and a majority of its international operations. Several
plans provide pension benefits based primarily on years
of service and employees’ earnings. In certain instances,
the Company adjusts benefits in connection with inter-
national employee transfers.
Retirement Growth Account Plan (U.S.)
The Retirement Growth Account Plan is a trust-based,
noncontributory qualified defined benefit pension plan.
The Company’s funding policy consists of contributions at
a rate that provides for future plan benefits and maintains
appropriate funded percentages. Such contribution is
not less than the minimum required by the Employee
Retirement Income Security Act of 1974 (“ERISA”), as
amended, and subsequent pension legislation and is not
more than the maximum amount deductible for income
tax purposes.
Restoration Plan (U.S.)
The Company also has an unfunded, non-qualified domes-
tic noncontributory pension Restoration Plan to provide
benefits in excess of Internal Revenue Code limitations.
International Pension Plans
The Company maintains international pension plans, the
most significant of which are defined benefit pension
plans. The Company’s funding policies for these plans are
determined by local laws and regulations. The Company’s
most significant defined benefit pension obligations are
included in the plan summaries below. The fiscal 2011
international plan summary reflects a plan amendment
and settlement that was a result of the establishment of a
successor defined benefit pension plan, to comply with
local regulations, for the employees of a particular inter-
national affiliate.
Post-retirement Benefit Plans
The Company maintains a domestic post-retirement
benefit plan which provides certain medical and dental
benefits to eligible employees. Employees hired after
January 1, 2002 are not eligible for retiree medical bene-
fits when they retire. Certain retired employees who are
receiving monthly pension benefits are eligible for par-
ticipation in the plan. Contributions required and benefits
received by retirees and eligible family members are
dependent on the age of the retiree. It is the Company’s
practice to fund these benefits as incurred and to provide
discretionary funding for the future liability up to the max-
imum amount deductible for income tax purposes.
Certain of the Company’s international subsidiaries
and affiliates have post-retirement plans, although most
participants are covered by government-sponsored or
administered programs.
The estimated fair values of the Company’s financial instruments are as follows:
JUNE 30, 2012 JUNE 30, 2011
Carrying Amount Fair Value Carrying Amount Fair Value
(In millions)
Nonderivatives
Cash and cash equivalents $1,347.7 $1,347.7 $1,253.0 $1,253.0
Available-for-sale securities 5.9 5.9 6.6 6.6
Current and long-term debt 1,288.1 1,478.9 1,218.1 1,293.5
Derivatives
Foreign currency forward contracts —
asset (liability) 11.5 11.5 (15.9) (15.9)