Estée Lauder Cos. Inc. (EL)

Estée Lauder’s investment objectives include capital preservation, maintaining adequate liquidity, asset diversification, and achieving appropriate returns within the guidelines set forth in Estée Lauder’s investment policy. These investments are classified as available-for-sale, with any temporary difference between the cost and fair value of an investment presented as a separate component of accumulated other comprehensive income (loss) (“AOCI”). During fiscal 2019, Estée Lauder sold its available-for-sale securities.

Investments in the common stock of privately-held companies in which Estée Lauder has significant influence, but less than a controlling financial interest, are accounted for under the equity method of accounting. Beginning in the first quarter of fiscal 2019, Estée Lauder accounts for its cost method investments at cost, less impairment, plus/minus subsequent observable price changes, and will be required to perform an assessment each quarter to determine whether or not a triggering event has occurred that results in changes in fair value. These investments were not material to Estée Lauder’s consolidated financial statements as of June 30, 2019 and 2018 and are included in Long-term investments in the accompanying consolidated balance sheets.

Estée Lauder evaluates investments held in unrealized loss positions for other-than-temporary impairment on a quarterly basis. Such evaluation involves a variety of considerations, including assessments of the risks and uncertainties associated with general economic conditions and distinct conditions affecting specific issuers. Factors considered by Estée Lauder include (i) the length of time and extent the security has been in a material loss position; (ii) the financial condition and creditworthiness of the issuer; (iii) future economic conditions and market forecasts related to the issuer’s industry, sector, or geography; (iv) Estée Lauder’s intent and ability to retain its investment until maturity or for a period of time sufficient to allow for recovery of market value; and (v) an assessment of whether it is more likely than not that Estée Lauder will be required to sell its investment before recovery of market value.

Source: 10-K (filing date: 2019-08-23).

Estée Lauder Cos. Inc., adjustment to Net Earnings Attributable To The Estée Lauder Companies Inc.

US$ in millions

	12 months ended	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014
	Net earnings attributable to The Estée Lauder Companies Inc. (as reported)
	Add: Net unrealized investment gain (loss)
	Net earnings attributable to The Estée Lauder Companies Inc. (adjusted)

Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).

Estée Lauder Cos. Inc., adjusted ratios

		Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).

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

		Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net earnings attributable to The Estée Lauder Companies Inc.
	Net sales
	Ratio
	Net profit margin1
	Adjusted: Mark to Market Available-for-sale Securities
	Selected Financial Data (US$ in millions)
	Adjusted net earnings attributable to The Estée Lauder Companies Inc.
	Net sales
	Ratio
	Adjusted net profit margin2

Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).

2019 Calculations

		Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net earnings attributable to The Estée Lauder Companies Inc.
	Stockholders’ equity, The Estée Lauder Companies Inc.
	Ratio
	ROE1
	Adjusted: Mark to Market Available-for-sale Securities
	Selected Financial Data (US$ in millions)
	Adjusted net earnings attributable to The Estée Lauder Companies Inc.
	Stockholders’ equity, The Estée Lauder Companies Inc.
	Ratio
	Adjusted ROE2

Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).

2019 Calculations

		Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net earnings attributable to The Estée Lauder Companies Inc.
	Total assets
	Ratio
	ROA1
	Adjusted: Mark to Market Available-for-sale Securities
	Selected Financial Data (US$ in millions)
	Adjusted net earnings attributable to The Estée Lauder Companies Inc.
	Total assets
	Ratio
	Adjusted ROA2

Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).

2019 Calculations