The estimated fair values of the Company’s financial instruments are as follows: JUNE 30, 2003 JUNE 30, 2002 Carrying Amount Fair Value Carrying Amount Fair Value (In millions) Nonderivatives Cash and cash equivalents $364.1 $364.1 $546.9 $546.9 Long-term debt,including current portion 291.4 320.9 410.5 415.6 Cumulative redeemable preferred stock 360.0 389.8 360.0 374.9 Derivatives Forward exchange contracts (6.5) (6.5) (14.8) (14.8) Foreign currency option contracts 3.6 3.6 — — Interest rate swap contract 8.1 8.1 — — Treasury rate lock contracts 2.6 2.6 — — NOTE 10 – PENSION, DEFERRED COMPENSATION AND POSTRETIREMENT 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 Companyadjusts benefits in connection with international employee transfers. Retirement Growth Account Plan (U.S.) The Retirement Growth Account Plan is a trust-based, noncontributory defined benefit pension plan. The Com- pany’s funding policy consists of an annual contribution at a rate that provides for future plan benefits and main- tains appropriate funded percentages. Such contribution is not less than the minimum required by the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) 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, nonqualified domes- tic benefit 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. Postretirement Benefits The Company maintains a domestic contributory post- retirement benefit plan which provides certain medical and dental benefits to eligible employees. Employees hired after January 1, 2002 will not be eligible for  retiree medical benefits when they retire. Certain retired employees who are receiving monthly pension benefits are eligible for participation 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. The cost of the Company-sponsored programs is not significant. Certain of the Company’s international subsidiaries  and affiliates have postretirement plans, although most participants are covered by government-sponsored or administered programs. THEEST{E LAUDER COMPANIES INC. 72