Name: Estée Lauder Cos. Inc. (NYSE:EL) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Estée Lauder Cos. Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Net earnings	1,010)	2,408)	2,875)	696)	1,794)	1,117)
Depreciation and amortization	744)	727)	651)	611)	557)	531)
Deferred income taxes	(186)	(149)	(230)	(143)	(66)	175)
Non-cash stock-based compensation	267)	331)	327)	213)	243)	236)
Net loss on disposal of property, plant and equipment	13)	8)	23)	20)	17)	15)
Non-cash restructuring and other charges	36)	14)	76)	20)	—)	1)
Pension and post-retirement benefit expense	53)	78)	95)	82)	72)	73)
Pension and post-retirement benefit contributions	(49)	(56)	(59)	(73)	(53)	(85)
Goodwill, other intangible and long-lived asset impairments	207)	241)	188)	1,426)	90)	—)
Changes in fair value of contingent consideration	—)	—)	(2)	(17)	(37)	(43)
Gain on liquidation of an investment in a foreign subsidiary, net	—)	—)	—)	—)	(71)	—)
Gain on previously held equity method investment	—)	(1)	(847)	(534)	—)	—)
Other non-cash items	(8)	(7)	(20)	(10)	(27)	(22)
(Increase) decrease in accounts receivable, net	185)	(10)	(398)	625)	(169)	(105)
(Increase) decrease in inventory and promotional merchandise	(64)	(602)	(140)	(3)	(375)	(147)
(Increase) decrease in other assets, net	26)	(101)	13)	(212)	(62)	12)
Increase (decrease) in accounts payable	(333)	210)	440)	(308)	319)	349)
Increase (decrease) in other accrued and noncurrent liabilities	(129)	1)	695)	(169)	285)	466)
Increase (decrease) in operating lease assets and liabilities, net	(41)	(52)	(56)	56)	—)	—)
Changes in operating assets and liabilities	(356)	(554)	554)	(11)	(2)	575)
Adjustments to reconcile net earnings to net cash flows from operating activities	721)	632)	756)	1,584)	723)	1,456)
Net cash flows provided by operating activities	1,731)	3,040)	3,631)	2,280)	2,517)	2,573)
Capital expenditures	(1,003)	(1,040)	(637)	(623)	(744)	(629)
Proceeds from purchase price refund	—)	—)	32)	—)	—)	—)
Payments for acquired businesses, net of cash acquired	—)	(3)	(1,065)	(1,047)	—)	(11)
Purchases of other intangible assets	(2,286)	—)	—)	—)	—)	—)
Proceeds from the disposition of investments	—)	—)	—)	—)	1,229)	749)
Purchases of investments	(8)	(10)	(42)	(5)	(14)	(478)
Proceeds from sale of property, plant and equipment	—)	—)	—)	—)	2)	—)
Settlement of net investment hedges	80)	108)	(152)	(23)	—)	—)
Net cash flows (used for) provided by investing activities	(3,217)	(945)	(1,864)	(1,698)	473)	(369)
Proceeds (repayments) of current debt, net	983)	(4)	(744)	755)	(171)	(8)
Proceeds from issuance of long-term debt, net	1,995)	—)	596)	2,481)	—)	—)
Debt issuance costs	(15)	(1)	(4)	(18)	—)	—)
Repayments and redemptions of long-term debt	(265)	(18)	(459)	(513)	(1)	(2)
Net proceeds from stock-based compensation transactions	88)	151)	215)	180)	192)	182)
Payment for acquisition of noncontrolling interest	—)	(15)	—)	—)	—)	—)
Payments to acquire treasury stock	(271)	(2,309)	(733)	(893)	(1,555)	(759)
Dividends paid to stockholders	(925)	(840)	(753)	(503)	(609)	(546)
Payments to noncontrolling interest holders for dividends	—)	—)	(8)	(10)	(6)	(4)
Payments of contingent consideration	—)	—)	(2)	(18)	(23)	(35)
Net cash flows provided by (used for) financing activities	1,590)	(3,036)	(1,892)	1,461)	(2,173)	(1,172)
Effect of exchange rate changes on Cash and cash equivalents	(32)	(60)	61)	(8)	(11)	13)
Net increase (decrease) in Cash and cash equivalents	72)	(1,001)	(64)	2,035)	806)	1,045)
Cash and cash equivalents at beginning of year	3,957)	4,958)	5,022)	2,987)	2,181)	1,136)
Cash and cash equivalents at end of year	4,029)	3,957)	4,958)	5,022)	2,987)	2,181)

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).

Analysis of the cash flow patterns between 2018 and 2023 reveals a period of significant volatility in net earnings, contrasted by a strategic shift toward aggressive asset acquisition and an increasing reliance on debt to sustain liquidity and shareholder returns.

Operating Cash Flow and Earnings Quality: Net earnings exhibited substantial fluctuations, peaking at 2,875 million USD in 2021 before declining to 1,010 million USD in 2023. Despite this volatility, net cash flows provided by operating activities remained relatively robust for most of the period, although a marked decrease to 1,731 million USD occurred in 2023. A significant non-cash event was observed in 2020, where goodwill and intangible asset impairments reached 1,426 million USD, indicating a major write-down of asset values. Depreciation and amortization showed a consistent upward trajectory, growing from 531 million USD in 2018 to 744 million USD in 2023, reflecting a growing base of fixed assets.
Investing Activities and Capital Expenditure: Investing activities transitioned from a net inflow in 2019 to heavy net outflows in subsequent years. Capital expenditures increased steadily, rising from 629 million USD in 2018 to over 1 billion USD in 2022 and 2023. The most notable surge in investing outflows occurred in 2023, driven by a 2,286 million USD purchase of other intangible assets. Additionally, substantial cash was deployed for business acquisitions in 2020 and 2021, with payments exceeding 1 billion USD in each of those years.
Financing Strategy and Shareholder Distributions: The financing profile is characterized by a balance between aggressive shareholder returns and opportunistic debt issuance. Dividends paid to stockholders grew consistently every year, increasing from 546 million USD in 2018 to 925 million USD in 2023. Share repurchases were highly irregular but substantial, peaking at 2,309 million USD in 2022. To fund these activities and acquisitions, the company utilized long-term debt issuance, most notably in 2020 (2,481 million USD) and 2023 (1,995 million USD), highlighting a strategic use of leverage to maintain liquidity during periods of high capital expenditure.
Liquidity and Cash Position: Cash and cash equivalents experienced a period of rapid accumulation between 2018 and 2020, peaking at 5,022 million USD. Since 2021, the cash position has stabilized and slightly contracted, ending at 4,029 million USD in 2023. This suggests a transition from a phase of cash hoarding to a phase of active deployment into intangible assets and the settlement of obligations.

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