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COMMITMENTS AND CONTINGENCIES (Tables)
12 Months Ended
Jun. 30, 2015
COMMITMENTS AND CONTINGENCIES  
Summary of scheduled maturities of contractual obligations for which cash flows are fixed and determinable

 

 

 

 

 

 

Payments Due in Fiscal

 

 

 

(In millions)

 

Total

 

2016

 

2017

 

2018

 

2019

 

2020

 

Thereafter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt service (1)

 

$

2,970.6 

 

$

104.4 

 

$

378.4 

 

$

59.4 

 

$

58.4 

 

$

57.8 

 

$

2,312.2 

 

Operating lease commitments (2)

 

1,927.8 

 

299.8 

 

279.4 

 

252.5 

 

205.7 

 

168.6 

 

721.8 

 

Unconditional purchase obligations (3)

 

2,871.9 

 

1,338.9 

 

358.4 

 

401.5 

 

288.5 

 

389.5 

 

95.1 

 

Gross unrecognized tax benefits and interest — current (4)

 

5.2 

 

5.2 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total contractual obligations

 

$

7,775.5 

 

$

1,748.3 

 

$

1,016.2 

 

$

713.4 

 

$

552.6 

 

$

615.9 

 

$

3,129.1 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes long-term and current debt and the related projected interest costs, and to a lesser extent, capital lease commitments.  Interest costs on long-term and current debt are projected to be $74.4 million in fiscal 2016 and fiscal 2017, $57.8 million in each of the years from fiscal 2018 through fiscal 2020 and $1,012.2 million thereafter.  Projected interest costs on variable rate instruments were calculated using market rates at June 30, 2015.  Refer to Note 10 — Debt.

 

(2)

Minimum operating lease commitments only include base rent.  Certain leases provide for contingent rents that are not measurable at inception and primarily include rents based on a percentage of sales in excess of stipulated levels, as well as common area maintenance.  These amounts are excluded from minimum operating lease commitments and are included in the determination of total rent expense when it is probable that the expense has been incurred and the amount is reasonably measurable.  Such amounts have not been material to total rent expense.  Total rental expense included in the accompanying consolidated statements of earnings was $402.2 million, $356.1 million and $332.4 million in fiscal 2015, 2014 and 2013, respectively.

 

(3)

Unconditional purchase obligations primarily include: inventory commitments, additional purchase price payable and contingent consideration which resulted from the fiscal 2015 acquisitions, earn-out payments related to the acquisition of Bobbi Brown,  royalty payments pursuant to license agreements, advertising commitments, capital improvement commitments, non-discretionary planned funding of pension and other post-retirement benefit obligations and commitments pursuant to executive compensation arrangements.  Future contingent consideration, earn-out payments and royalty and advertising commitments were estimated based on planned future sales for the term that was in effect at June 30, 2015, without consideration for potential renewal periods.

 

(4)

Refer to Note 8 — Income Taxes for information regarding unrecognized tax benefits.  As of June 30, 2015, the noncurrent portion of the Company’s unrecognized tax benefits, including related accrued interest and penalties was $89.1 million.  At this time, the settlement period for the noncurrent portion of the unrecognized tax benefits, including related accrued interest and penalties, cannot be determined and therefore was not included.