Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Estée Lauder Cos. Inc., income tax expense (benefit), continuing operations

US$ in millions

12 months ended:	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Federal	141)	219)	197)	128)	180)	334)
Foreign	424)	533)	479)	368)	383)	357)
State and local	8)	25)	10)	(3)	16)	(3)
Current	573)	777)	686)	493)	579)	688)
Federal	(105)	(12)	(129)	(93)	(95)	135)
Foreign	(77)	(136)	(100)	(49)	27)	35)
State and local	(4)	(1)	(1)	(1)	2)	5)
Deferred	(186)	(149)	(230)	(143)	(66)	175)
Provision for income taxes	387)	628)	456)	350)	513)	863)

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).

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Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Estée Lauder Cos. Inc. current increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Estée Lauder Cos. Inc. deferred increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Estée Lauder Cos. Inc. provision for income taxes increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Estée Lauder Cos. Inc., effective income tax rate (EITR) reconciliation

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Provision for income taxes at statutory rate	21.00%	21.00%	21.00%	21.00%	21.00%	28.10%
State and local income taxes, net of federal tax benefit	0.30%	0.70%	0.50%	-0.10%	0.60%	0.50%
Stock-based compensation arrangements, excess tax benefits, net	-0.80%	-2.70%	-3.00%	-7.50%	-2.70%	-2.50%
Previously held equity method investment gain, DECIEM	0.00%	0.00%	-5.30%	0.00%	0.00%	0.00%
GILTI, High-Tax Exception election, adjustment for prior years	0.00%	0.00%	-1.40%	0.00%	0.00%	0.00%
Taxation of foreign operations	8.60%	1.40%	1.80%	11.00%	1.90%	-4.70%
Income tax reserve adjustments	-0.10%	0.30%	-0.20%	0.40%	0.50%	-0.50%
Nondeductible goodwill impairment charges	0.00%	0.00%	0.10%	8.00%	0.60%	0.00%
Other, net	-1.30%	0.00%	0.20%	0.70%	0.10%	-0.10%
Effective tax rate, before TCJA net income tax impact	27.70%	20.70%	13.70%	33.50%	22.00%	20.80%
TCJA net income tax impact	0.00%	0.00%	0.00%	0.00%	0.20%	22.80%
Effective tax rate	27.70%	20.70%	13.70%	33.50%	22.20%	43.60%

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).

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Item	Description	The company
Effective tax rate, before TCJA net income tax impact	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Estée Lauder Cos. Inc. effective tax rate, before TCJA net income tax impact increased from 2021 to 2022 and from 2022 to 2023.

Estée Lauder Cos. Inc., components of deferred tax assets and liabilities

US$ in millions

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Compensation-related expenses	189)	203)	210)	142)	179)	161)
Inventory obsolescence and other inventory related reserves	75)	59)	72)	75)	64)	57)
Retirement benefit obligations	60)	42)	54)	71)	71)	45)
Various accruals not currently deductible	225)	269)	239)	212)	206)	175)
Net operating loss, credit and other carryforwards	225)	192)	169)	98)	41)	48)
Unrecognized state tax benefits and accrued interest	12)	13)	12)	12)	12)	12)
Lease liabilities	479)	504)	591)	585)	—)	—)
Research-related expenses	200)	—)	—)	—)	—)	—)
Other differences between tax and financial statement values	107)	26)	74)	217)	125)	55)
Deferred tax assets, gross	1,572)	1,308)	1,421)	1,412)	698)	553)
Valuation allowance for deferred tax assets	(200)	(185)	(168)	(107)	(48)	(45)
Deferred tax assets	1,372)	1,123)	1,253)	1,305)	650)	508)
Fixed assets and intangibles	(264)	(204)	(329)	(563)	(286)	(338)
ROU assets	(432)	(452)	(517)	(504)	—)	—)
Partnership interest in DECIEM	(404)	(431)	(467)	—)	—)	—)
Other differences between tax and financial statement values	(32)	(33)	(158)	(194)	(69)	(50)
Deferred tax liabilities	(1,132)	(1,120)	(1,471)	(1,261)	(355)	(388)
Net deferred tax assets (liabilities)	240)	3)	(218)	44)	295)	120)

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).

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Item	Description	The company
Deferred tax assets, gross	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Estée Lauder Cos. Inc. deferred tax assets, gross decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Estée Lauder Cos. Inc. deferred tax assets decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Estée Lauder Cos. Inc. net deferred tax assets (liabilities) increased from 2021 to 2022 and from 2022 to 2023.

Estée Lauder Cos. Inc., deferred tax assets and liabilities, classification

US$ in millions

		Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
	Deferred tax assets (included in Other assets)	860)	695)	631)	443)	295)	120)
	Deferred tax liabilities (included in Other noncurrent liabilities)	620)	692)	849)	399)	—)	—)

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).

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Item	Description	The company
Deferred tax assets (included in Other assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Estée Lauder Cos. Inc. deferred tax assets (included in Other assets) increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax liabilities (included in Other noncurrent liabilities)	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Estée Lauder Cos. Inc. deferred tax liabilities (included in Other noncurrent liabilities) decreased from 2021 to 2022 and from 2022 to 2023.

Estée Lauder Cos. Inc., adjustments to financial statements

US$ in millions

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Adjustment to Total Assets
Total assets (as reported)	23,415)	20,910)	21,971)	17,781)	13,156)	12,567)
Less: Noncurrent deferred tax assets, net	860)	695)	631)	443)	295)	120)
Total assets (adjusted)	22,555)	20,215)	21,340)	17,338)	12,861)	12,447)
Adjustment to Total Liabilities
Total liabilities (as reported)	16,998)	14,478)	15,023)	13,819)	8,745)	7,857)
Less: Noncurrent deferred tax liabilities, net	620)	692)	849)	399)	—)	—)
Total liabilities (adjusted)	16,378)	13,786)	14,174)	13,420)	8,745)	7,857)
Adjustment to Stockholders’ Equity, The Estée Lauder Companies Inc.
Stockholders’ equity, The Estée Lauder Companies Inc. (as reported)	5,585)	5,590)	6,057)	3,935)	4,386)	4,688)
Less: Net deferred tax assets (liabilities)	240)	3)	(218)	44)	295)	120)
Stockholders’ equity, The Estée Lauder Companies Inc. (adjusted)	5,345)	5,587)	6,275)	3,891)	4,091)	4,568)
Adjustment to Net Earnings Attributable To The Estée Lauder Companies Inc.
Net earnings attributable to The Estée Lauder Companies Inc. (as reported)	1,006)	2,390)	2,870)	684)	1,785)	1,108)
Add: Deferred income tax expense (benefit)	(186)	(149)	(230)	(143)	(66)	175)
Net earnings attributable to The Estée Lauder Companies Inc. (adjusted)	820)	2,241)	2,640)	541)	1,719)	1,283)

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).

Estée Lauder Cos. Inc., Financial Data: Reported vs. Adjusted

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Estée Lauder Cos. Inc., adjusted financial ratios

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Net Profit Margin
Reported net profit margin	6.32%	13.47%	17.70%	4.79%	12.01%	8.10%
Adjusted net profit margin	5.15%	12.63%	16.28%	3.78%	11.57%	9.38%
Total Asset Turnover
Reported total asset turnover	0.68	0.85	0.74	0.80	1.13	1.09
Adjusted total asset turnover	0.71	0.88	0.76	0.82	1.16	1.10
Financial Leverage
Reported financial leverage	4.19	3.74	3.63	4.52	3.00	2.68
Adjusted financial leverage	4.22	3.62	3.40	4.46	3.14	2.72
Return on Equity (ROE)
Reported ROE	18.01%	42.75%	47.38%	17.38%	40.70%	23.63%
Adjusted ROE	15.34%	40.11%	42.07%	13.90%	42.02%	28.09%
Return on Assets (ROA)
Reported ROA	4.30%	11.43%	13.06%	3.85%	13.57%	8.82%
Adjusted ROA	3.64%	11.09%	12.37%	3.12%	13.37%	10.31%

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).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Estée Lauder Cos. Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Estée Lauder Cos. Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Estée Lauder Cos. Inc. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Estée Lauder Cos. Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Estée Lauder Cos. Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Estée Lauder Cos. Inc., Financial Ratios: Reported vs. Adjusted

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	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to The Estée Lauder Companies Inc.	1,006)	2,390)	2,870)	684)	1,785)	1,108)
Net sales	15,910)	17,737)	16,215)	14,294)	14,863)	13,683)
Profitability Ratio
Net profit margin¹	6.32%	13.47%	17.70%	4.79%	12.01%	8.10%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to The Estée Lauder Companies Inc.	820)	2,241)	2,640)	541)	1,719)	1,283)
Net sales	15,910)	17,737)	16,215)	14,294)	14,863)	13,683)
Profitability Ratio
Adjusted net profit margin²	5.15%	12.63%	16.28%	3.78%	11.57%	9.38%

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).

2023 Calculations

¹ Net profit margin = 100 × Net earnings attributable to The Estée Lauder Companies Inc. ÷ Net sales
= 100 × 1,006 ÷ 15,910 = 6.32%

² Adjusted net profit margin = 100 × Adjusted net earnings attributable to The Estée Lauder Companies Inc. ÷ Net sales
= 100 × 820 ÷ 15,910 = 5.15%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Estée Lauder Cos. Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net sales	15,910)	17,737)	16,215)	14,294)	14,863)	13,683)
Total assets	23,415)	20,910)	21,971)	17,781)	13,156)	12,567)
Activity Ratio
Total asset turnover¹	0.68	0.85	0.74	0.80	1.13	1.09
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales	15,910)	17,737)	16,215)	14,294)	14,863)	13,683)
Adjusted total assets	22,555)	20,215)	21,340)	17,338)	12,861)	12,447)
Activity Ratio
Adjusted total asset turnover²	0.71	0.88	0.76	0.82	1.16	1.10

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).

2023 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 15,910 ÷ 23,415 = 0.68

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 15,910 ÷ 22,555 = 0.71

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Estée Lauder Cos. Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets	23,415)	20,910)	21,971)	17,781)	13,156)	12,567)
Stockholders’ equity, The Estée Lauder Companies Inc.	5,585)	5,590)	6,057)	3,935)	4,386)	4,688)
Solvency Ratio
Financial leverage¹	4.19	3.74	3.63	4.52	3.00	2.68
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	22,555)	20,215)	21,340)	17,338)	12,861)	12,447)
Adjusted stockholders’ equity, The Estée Lauder Companies Inc.	5,345)	5,587)	6,275)	3,891)	4,091)	4,568)
Solvency Ratio
Adjusted financial leverage²	4.22	3.62	3.40	4.46	3.14	2.72

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).

2023 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity, The Estée Lauder Companies Inc.
= 23,415 ÷ 5,585 = 4.19

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity, The Estée Lauder Companies Inc.
= 22,555 ÷ 5,345 = 4.22

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Estée Lauder Cos. Inc. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to The Estée Lauder Companies Inc.	1,006)	2,390)	2,870)	684)	1,785)	1,108)
Stockholders’ equity, The Estée Lauder Companies Inc.	5,585)	5,590)	6,057)	3,935)	4,386)	4,688)
Profitability Ratio
ROE¹	18.01%	42.75%	47.38%	17.38%	40.70%	23.63%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to The Estée Lauder Companies Inc.	820)	2,241)	2,640)	541)	1,719)	1,283)
Adjusted stockholders’ equity, The Estée Lauder Companies Inc.	5,345)	5,587)	6,275)	3,891)	4,091)	4,568)
Profitability Ratio
Adjusted ROE²	15.34%	40.11%	42.07%	13.90%	42.02%	28.09%

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).

2023 Calculations

¹ ROE = 100 × Net earnings attributable to The Estée Lauder Companies Inc. ÷ Stockholders’ equity, The Estée Lauder Companies Inc.
= 100 × 1,006 ÷ 5,585 = 18.01%

² Adjusted ROE = 100 × Adjusted net earnings attributable to The Estée Lauder Companies Inc. ÷ Adjusted stockholders’ equity, The Estée Lauder Companies Inc.
= 100 × 820 ÷ 5,345 = 15.34%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Estée Lauder Cos. Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to The Estée Lauder Companies Inc.	1,006)	2,390)	2,870)	684)	1,785)	1,108)
Total assets	23,415)	20,910)	21,971)	17,781)	13,156)	12,567)
Profitability Ratio
ROA¹	4.30%	11.43%	13.06%	3.85%	13.57%	8.82%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to The Estée Lauder Companies Inc.	820)	2,241)	2,640)	541)	1,719)	1,283)
Adjusted total assets	22,555)	20,215)	21,340)	17,338)	12,861)	12,447)
Profitability Ratio
Adjusted ROA²	3.64%	11.09%	12.37%	3.12%	13.37%	10.31%

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).

2023 Calculations

¹ ROA = 100 × Net earnings attributable to The Estée Lauder Companies Inc. ÷ Total assets
= 100 × 1,006 ÷ 23,415 = 4.30%

² Adjusted ROA = 100 × Adjusted net earnings attributable to The Estée Lauder Companies Inc. ÷ Adjusted total assets
= 100 × 820 ÷ 22,555 = 3.64%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Estée Lauder Cos. Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Estée Lauder Cos. Inc. (NYSE:EL)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Estée Lauder Cos. Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Estée Lauder Cos. Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)