NOTE 18 – SEGMENT DATA AND RELATED INFORMATION  NOTE 16– NET UNREALIZED INVESTMENT GAINS NOTE 17– STATEMENT OF CASH FLOWS Supplemental disclosure of significant  non-cash transactions Under SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” available-for-sale securities are recorded at market value. Unrealized holding gains and losses, net of the related tax effect, on available- for-sale securities are excluded from earnings and are reported as a component of stockholders’ equity until realized. The Company’s investments subject to the pro- visions of SFAS No. 115 are treated as available-for-sale and, accordingly, the applicable investments have been adjusted to market value with a corresponding adjust- ment, net of tax, to net unrealized investment gains in accumulated other comprehensive income. Included  in accumulated other comprehensive income was an unrealized investment gain (net of deferred taxes) of $0.7 million at June 30, 2003 and an unrealized investment loss (net of deferred taxes) of $0.1 million at June 30, 2002. As a result of stock option exercises, the Company recorded tax benefits of $7.9 million, $2.9 million and $7.2 million during fiscal 2003, 2002 and 2001, respec- tively, which are included in additional paid-in capital in the accompanying consolidated financial statements. As of June 30, 2003, the Company had a current asset and an equal and offsetting increase in long-term debt of $8.1 million reflecting the fair market value of an interest rate swap which was classified as a fair value hedge of the 6% Senior Notes (see Note 8). Reportable operating segments, as defined by SFAS  No. 131, “Disclosures about Segments of an Enterprise and Related Information,” include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the “Chief Executive”) in deciding how to allocate resources and in assessing performance. As a result of the similarities in the manufacturing, marketing and distribution processes for all of the Company’s products, much of the information provided in the consolidated financial statements is similar to, or the same as, that reviewed on a regular basis by the Chief Execu- tive. Although the Company operates in one business seg- ment, beauty products, management also evaluates performance on a product category basis. While the Company’s results of operations are also reviewed on a consolidated basis, the Chief Executive reviews data segmented on a basis that facilitates com- parison to industry statistics. Accordingly, net sales, depre- ciation and amortization, and operating income are available with respect to the manufacture and distribution of skin care, makeup, fragrance, hair care and other products. These product categories meet the Financial Accounting Standards Board’s definition of operating segments and therefore, additional financial data are provided below. The “other” segment includes the sales and related results of ancillary products and services that do not fit the definition of skin care, makeup, fragrance and hair care. The Company evaluates segment performance based upon operating income, which represents earnings before income taxes, minority interest and net interest income  or expense. The accounting policies for each of the reportable segments are the same as those described in the summary of significant accounting policies, except for depreciation and amortization charges, which are allocated, primarily, based upon net sales. The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consoli- dated financial statements, thus no additional information is produced for the Chief Executive or included herein. THEEST{E LAUDER COMPANIES INC. 79