Analysis of Debt
Total Debt (Carrying Amount)
Estée Lauder Cos. Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
- Current Debt
- The current debt exhibited significant volatility over the observed periods. Starting at $183 million in mid-2018, it escalated sharply to $516 million in 2019 and further spiked to $1,222 million in 2020. A remarkable decline followed in 2021, dropping to $32 million, the lowest in the six-year span. Subsequently, current debt increased again, reaching $268 million in 2022 and rising substantially to $997 million by mid-2023.
- Long-term Debt, Excluding Current Maturities
- Long-term debt showed a complex pattern characterized by an initial decrease followed by steady growth. The debt decreased from $3,361 million in 2018 to $2,896 million in 2019. However, it then surged to $4,914 million in 2020 and continued ascending to $5,537 million in 2021. A slight reduction occurred in 2022, with the debt at $5,144 million, but the upward trend resumed sharply, reaching a peak of $7,117 million in mid-2023.
- Total Current and Long-term Debt (Carrying Amount)
- Total debt, combining current and long-term amounts, reflected notable fluctuations aligned with the individual components. The total decreased modestly from $3,544 million in 2018 to $3,412 million in 2019. It then nearly doubled to $6,136 million in 2020. A decrease followed in 2021 to $5,569 million, with a further slight decline to $5,412 million in 2022. The total debt surged again significantly to $8,114 million in 2023, reaching the highest value recorded in the period.
- Overall Insights
- The debt profile reveals a pattern of variability, with a sharp rise in both current and long-term debt during 2020, likely influenced by specific financial or strategic factors. Following a reduction in current debt in 2021, the substantial increase in 2023 for both debt categories suggests renewed borrowing or financing activities. The substantial growth in long-term debt, particularly in 2023, is a critical factor driving the overall debt increase, indicating a possible shift towards longer maturity debt obligations. Monitoring the drivers behind these fluctuations and their impact on financial stability is advisable.
Total Debt (Fair Value)
| Jun 30, 2023 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Total current and long-term debt (fair value) | 7,665) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.94 |
Based on: 10-K (reporting date: 2023-06-30).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt: 3.65%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 5.15% | 590) | 30) | |
| 3.13% | 636) | 20) | |
| 4.15% | 494) | 21) | |
| 4.38% | 454) | 20) | |
| 3.70% | 247) | 9) | |
| 6.00% | 295) | 18) | |
| 5.75% | 198) | 11) | |
| 4.65% | 695) | 32) | |
| 1.95% | 550) | 11) | |
| 2.60% | 589) | 15) | |
| 2.38% | 643) | 15) | |
| 4.38% | 696) | 30) | |
| 3.15% | 499) | 16) | |
| 2.00% | 498) | 10) | |
| Total | 7,084) | 259) | |
| 3.65% | |||
Based on: 10-K (reporting date: 2023-06-30).
1 US$ in millions
2 Weighted-average interest rate = 100 × 259 ÷ 7,084 = 3.65%