Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Estée Lauder Cos. Inc. (NYSE:EL)

Analysis of Property, Plant and Equipment

Advanced level

Property, Plant and Equipment Disclosure

Estée Lauder Cos. Inc., balance sheet: property, plant and equipment

US$ in millions

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Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Land 33  29  30  30  15  15 
Buildings and improvements 400  337  237  192  187  185 
Machinery and equipment 865  811  719  668  680  671 
Computer hardware and software 1,335  1,264  1,193  1,115  1,041  1,012 
Furniture and fixtures 120  116  104  96  84  74 
Leasehold improvements 2,381  2,274  2,152  1,918  1,790  1,622 
Property, plant and equipment, gross 5,134  4,831  4,435  4,019  3,796  3,580 
Accumulated depreciation and amortization (3,079) (2,763) (2,612) (2,348) (2,213) (2,089)
Property, plant and equipment, net 2,055  2,068  1,823  1,671  1,583  1,490 

Based on: 10-K (filing date: 2020-08-28), 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).

Item Description The company
Property, plant and equipment, gross Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Estée Lauder Cos. Inc.’s property, plant and equipment, gross increased from 2018 to 2019 and from 2019 to 2020.
Property, plant and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Estée Lauder Cos. Inc.’s property, plant and equipment, net increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.

Asset Age Ratios (Summary)

Estée Lauder Cos. Inc., asset age ratios

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Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Average age ratio 60.36% 57.54% 59.30% 58.86% 58.53% 58.62%
Estimated total useful life (years) 10 10 9 9 9 9
Estimated age, time elapsed since purchase (years) 6 6 6 5 6 5
Estimated remaining life (years) 4 4 4 4 4 4

Based on: 10-K (filing date: 2020-08-28), 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).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Estée Lauder Cos. Inc.’s average age ratio of depreciable property, plant and equipment improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Estée Lauder Cos. Inc.’s estimated total useful life of depreciable property, plant and equipment increased from 2018 to 2019 and from 2019 to 2020.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Estée Lauder Cos. Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.
Estimated remaining life Estée Lauder Cos. Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.

Average Age

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Accumulated depreciation and amortization 3,079  2,763  2,612  2,348  2,213  2,089 
Property, plant and equipment, gross 5,134  4,831  4,435  4,019  3,796  3,580 
Land 33  29  30  30  15  15 
Asset Age Ratio
Average age1 60.36% 57.54% 59.30% 58.86% 58.53% 58.62%

Based on: 10-K (filing date: 2020-08-28), 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).

2020 Calculations

1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property, plant and equipment, gross – Land)
= 100 × 3,079 ÷ (5,134 – 33) = 60.36%

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Estée Lauder Cos. Inc.’s average age ratio of depreciable property, plant and equipment improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Property, plant and equipment, gross 5,134  4,831  4,435  4,019  3,796  3,580 
Land 33  29  30  30  15  15 
Depreciation and amortization of property, plant and equipment 514  495  469  428  401  400 
Asset Age Ratio (Years)
Estimated total useful life1 10 10 9 9 9 9

Based on: 10-K (filing date: 2020-08-28), 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).

2020 Calculations

1 Estimated total useful life = (Property, plant and equipment, gross – Land) ÷ Depreciation and amortization of property, plant and equipment
= (5,134 – 33) ÷ 514 = 10

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Estée Lauder Cos. Inc.’s estimated total useful life of depreciable property, plant and equipment increased from 2018 to 2019 and from 2019 to 2020.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Accumulated depreciation and amortization 3,079  2,763  2,612  2,348  2,213  2,089 
Depreciation and amortization of property, plant and equipment 514  495  469  428  401  400 
Asset Age Ratio (Years)
Time elapsed since purchase1 6 6 6 5 6 5

Based on: 10-K (filing date: 2020-08-28), 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).

2020 Calculations

1 Time elapsed since purchase = Accumulated depreciation and amortization ÷ Depreciation and amortization of property, plant and equipment
= 3,079 ÷ 514 = 6

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Estée Lauder Cos. Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Property, plant and equipment, net 2,055  2,068  1,823  1,671  1,583  1,490 
Land 33  29  30  30  15  15 
Depreciation and amortization of property, plant and equipment 514  495  469  428  401  400 
Asset Age Ratio (Years)
Estimated remaining life1 4 4 4 4 4 4

Based on: 10-K (filing date: 2020-08-28), 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).

2020 Calculations

1 Estimated remaining life = (Property, plant and equipment, net – Land) ÷ Depreciation and amortization of property, plant and equipment
= (2,055 – 33) ÷ 514 = 4

Asset age ratio Description The company
Estimated remaining life Estée Lauder Cos. Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.