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Press Release: The Estée Lauder Companies Reports -7-

· 02/05/2021 06:45
Reconciliation of Certain Consolidated Statements of Earnings Accounts Before and After Returns, Charges and Other Adjustments (Unaudited) Three Months Ended December 31 ---------------------------------------------------------------------------------------------------------------- -------------------- 2020 2019 % Change ----------------------------------------------------------------------- --------------------------------------- -------------------- Impact of ($ in millions, Returns/ Foreign Non-GAAP, Returns/ Non-GAAP, except per share As Charges/ Non- Currency Constant As Charges/ Non- Non- Constant data) Reported Adjustments GAAP Translation Currency Reported Adjustments GAAP GAAP Currency ---------------- ---------- --------------- ---------- --------------- ------------- ---------- --------------- ---------- ------- ----------- Net sales $4,853 $ -- $4,853 $ (102) $ 4,751 $4,624 $ -- $4,624 5% 3% Cost of sales 1,084 (2) 1,082 (17) 1,065 1,041 (6) 1,035 ---------------- ------ -------- ---- ------ --------- --- --------- ------ -------- ---- ------ ------- ----------- Gross profit 3,769 2 3,771 (85) 3,686 3,583 6 3,589 5% 3% ---------------- ------ -------- ----- ------ --------- --- --------- ------ -------- ----- ------ --- ---- ---- Gross margin 77.7% 77.7% 77.6% 77.5% 77.6% Operating expenses 2,706 (114) 2,592 (55) 2,537 3,322 (777) 2,545 2% --% ---------------- ------ -------- ---- ------ --------- --- --------- ------ -------- ---- ------ --- ---- ---- Operating expense margin 55.8% 53.4% 53.4% 71.8% 55.0% ---------------- ------ --------------- ------ --------------- --------- ------ --------------- ------ ------- ----------- Operating income 1,063 116 1,179 (30) 1,149 261 783 1,044 13% 10% ---------------- ------ -------- ----- ------ --------- --- --------- ------ -------- ----- ------ --- ---- ---- Operating income margin 21.9% 24.3% 24.2% 5.6% 22.6% Other income -- -- -- -- -- 576 (576) -- -- -- Provision for income taxes 153 29 182 (7) 175 250 (10) 240 (24)% (27)% ---------------- ------ -------- ----- ------ --------- --- --------- ------ -------- ---- ------ --- ---- --- Net earnings attributable to The Estée Lauder Companies Inc. $ 873 $ 87 $ 960 $ (23) $ 937 $ 557 $ 217 $ 774 24% 21% ---------------- ----- ---- ----- ----- ----- --- ----- ----- ---- ----- ----- --- ---- ---- Diluted EPS $ 2.37 $ .24 $ 2.61 $ (.06) $ 2.55 $ 1.52 $ .59 $ 2.11 24% 21% ---------------- ----- ---- ----- ----- ----- --- ----- ----- ---- ----- ----- --- ---- ---- Reconciliation of Certain Consolidated Statements of Earnings Accounts Before and After Returns, Charges and Other Adjustments (Unaudited) Six Months Ended December 31 ------------------------------------------------------------------------------------------------------------- ------------------- 2020 2019 % Change -------------------------------------------------------------------- --------------------------------------- ------------------- Impact of Non- Non- ($ in millions, Returns/ Foreign GAAP, Returns/ GAAP, except per share As Charges/ Non- Currency Constant As Charges/ Non- Non- Constant data) Reported Adjustments GAAP Translation Currency Reported Adjustments GAAP GAAP Currency ---------------- ---------- --------------- ---------- --------------- ---------- ---------- --------------- ---------- ------- ---------- Net sales $8,415 $ -- $8,415 $ (117) $8,298 $8,519 $ -- $8,519 (1)% (3)% Cost of sales 1,909 (5) 1,904 (19) 1,885 1,949 (8) 1,941 ---------------- ------ -------- ---- ------ --------- --- ------ ------ -------- ---- ------ ------- ---------- Gross profit 6,506 5 6,511 (98) 6,413 6,570 8 6,578 (1)% (3)% ---------------- ------ -------- ----- ------ --------- --- ------ ------ -------- ----- ------ --- ---- Gross margin 77.3% 77.4% 77.3% 77.1% 77.2% Operating expenses 4,738 (120) 4,618 (69) 4,549 5,530 (800) 4,730 (2)% (4)% ---------------- ------ -------- ---- ------ --------- --- ------ ------ -------- ---- ------ --- ---- Operating expense margin 56.3% 54.9% 54.8% 64.9% 55.5% ---------------- ------ --------------- ------ --------------- ------ ------ --------------- ------ ------- ---------- Operating income 1,768 125 1,893 (29) 1,864 1,040 808 1,848 2% 1% ---------------- ------ -------- ----- ------ --------- --- ------ ------ -------- ----- ------ --- ---- --- Operating income margin 21.0% 22.5% 22.5% 12.2% 21.7% Other income -- -- -- -- -- 576 (576) -- -- -- Provision for income taxes 299 31 330 (6) 324 412 (6) 406 (19)% (20)% ---------------- ------ -------- ----- ------ --------- --- ------ ------ -------- ---- ------ --- ---- Net earnings attributable to The Estée Lauder Companies Inc. $1,396 $ 94 $1,490 $ (24) $1,466 $1,152 $ 238 $1,390 7% 5% ---------------- ----- ---- ----- ----- ----- --- ----- ----- ---- ----- ----- --- ---- --- Diluted EPS $ 3.79 $ .25 $ 4.04 $ (.06) $ 3.98 $ 3.13 $ .65 $ 3.78 7% 5% ---------------- ----- ---- ----- ----- ----- --- ----- ----- ---- ----- ----- --- ---- --- CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, except where noted)

The Company operates on a global basis, with the majority of its net sales generated outside the United States. Accordingly, fluctuations in foreign currency exchange rates can affect the Company's results of operations. Therefore, the Company presents certain net sales, operating results and diluted earnings per share information excluding the effect of foreign currency rate fluctuations to provide a framework for assessing the performance of its underlying business outside the United States. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. The Company calculates constant currency information by translating current-period results using prior-year period weighted-average foreign currency exchange rates and adjusting for the period-over-period impact of foreign currency cash flow hedging activities.

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February 05, 2021 06:45 ET (11:45 GMT)