activities in 2003 primarily relates to common stock repur- chases, the repayment of long-term debt and dividend payments.Net cash used for financing during fiscal 2002 primarily relates to dividend payments and common stock repurchases. The net cash used in fiscal 2001 was prima- rily related to dividend payments. tional pension plans are comprised of defined benefit and defined contribution plans. Several factors influence our annual funding require- ments. For the U.S. Plan, our funding policy consists of an annual contribution 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, as amended (“ERISA”), and subsequent pension leg- islation and is not more than the maximum amount deductible for income tax purposes. For each international plan, our funding policies are determined by local laws and regulations. In addition, amounts necessary to fund future obligations under these plans could vary depending on estimated assumptions (as detailed in “Critical Accounting Polices and Estimates”). The effect on operat- ing results in the future of pension plan funding will depend on economic conditions, employee demograph- ics, mortality rates, the number of participants electing to take lump-sum distributions, investment performance and funding decisions. The Board of Directors declared, and we paid on our Class A Common Stock and Class B Common Stock, an annual dividend of $.20 per share in fiscal 2003 and quarterly dividends at the rate of $.05 per share in each quarter of fiscal 2002 and 2001. The last quarterly divi- dend of $.05 per share was paid in the first quarter of fiscal 2003. As previously disclosed, the Board of Direc- tors determined that,at its discretion, it would declare and the Company would pay dividends on its common stock annually rather than quarterly commencing in fiscal 2003. In fiscal 2003, 2002 and 2001, dividends declared on our common stock totaled $46.5 million, $47.5 million and $47.7 million, respectively. Total dividends declared, including dividends on the $6.50 Cumulative Redeemable Preferred Stock, were $69.9 million, $70.9 million and $71.1 million in fiscal 2003, 2002 and 2001, respectively. During fiscal 2003, we changed certain of the underly- ing assumptions associated with our pension plans based upon the recent past performance and outlook of the securities markets, resulting in a larger funding require- ment. In addition, the assets associated with the pension plans experienced negative investment returns, which also affected our funding requirements. Even after considering the impact of these factors, there was no minimum contribution to the U.S. Plan required by ERISA for fiscal 2003 and 2002. However, at management’s discretion, we made cash contributions to the U.S. Plan of $76.0 million and $43.0 million during fiscal 2003 and 2002, respectively. In September 1998, our Board of Directors authorized a share repurchase program to repurchase a total of up to 8.0 million shares of Class A Common Stock in the open market or in privately negotiated transactions, depending on market conditions and other factors. In October 2002, the Board of Directors authorized the repurchase of up to 10.0 million additional shares of Class A Common Stock, increasing the total authorization under the share repurchase program to 18.0 million shares. During fiscal 2003, we purchased 11.2 million shares for $352.4 million. As of June 30, 2003, we have purchased approxi- mately 13.8 million shares under this program. Subse- quent to year-end, we purchased an additional 0.4 million shares for $12.3 million bringing the cumulative total of acquired shares to 14.2 million. In addition, at June 30, 2003, we recognized a liability on our balance sheet for each pension plan if the fair mar- ket value of the assets of that plan was less than the accu- mulated benefit obligation and, accordingly, a charge is recorded in accumulated other comprehensive income (loss) in shareholders’ equity. During fiscal 2003 and 2002, we recorded a charge to accumulated other comprehen- sive income (loss) of $20.3 million and $7.9 million, respectively. This charge had no impact on our consoli- dated net earnings or liquidity. We maintain pension plans covering substantially all of our full-time employees for our U.S. operations and a majority of our international operations. Several plans pro- vide pension benefits based primarily on years of service and employees’ earnings. In the United States, we main- tain a trust-based, noncontributory defined benefit pen- sion plan (“U.S. Plan”). Additionally, we have an unfunded, nonqualified domestic benefit plan to provide benefits in excess of Internal Revenue Code limitations. Our interna- We will be required to redeem the outstanding $6.50 Cumulative Redeemable Preferred Stock on June 30, 2005. However, in the event that Mrs. Estée Lauder were to pass away before such date, then we would have the right to redeem the shares from the current holders, and THEEST{E LAUDER COMPANIES INC. 51 Commitments and Contingencies Pension Plan Funding and Expense Share Repurchase Program Dividends