What changed in this filing

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Item 9A. Controls and Procedures

2023-08-18 compared with 2022-08-24 · 532 added, 498 removed, 2341 unchanged (31% of the section changed)

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Other Information.

Trading Arrangements

During the fiscal 2023 fourth quarter, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408(a) of Regulation S-K under the Exchange Act.

Compensatory Arrangements of Certain Officers

We are reporting the following information regarding our Executive Annual Incentive Plan in this Item 9B in lieu of filing such information on a Current Report on Form 8-K under Item 5.02(e) “Departure of Directors or Certain Officers;

Election of Directors;

Appointment of Certain Officers;

Compensation Arrangements of Certain Officers.”

On August 14, 2023, the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of the Company adopted a new executive annual incentive plan, The Estée Lauder Companies Inc.

Executive Annual Incentive Plan (the “Plan”).

Commencing for the Company’s fiscal year beginning July 1, 2023, the Plan replaces the executive annual incentive plan adopted by the Compensation Committee on August 21, 2013 (the “2013 Plan”), which the Company will cease using.

The principal purposes of the Plan are to provide incentives and rewards to the “executive officers” of the Company and to assist the Company in motivating them to achieve the Company’s annual performance goals.

The Plan is administered by the Compensation Committee or such other committee as may be appointed by the Board (the “Committee”).

The Committee, in its discretion, may grant opportunities to executive officers for each fiscal year of the Company as it shall determine.

For purposes of the Plan, “executive officers” means those persons who are denoted as such from time to time by the Company in the Company’s filings with the Securities and Exchange Commission, or those persons as determined by the Board from time to time.

Under the Plan, each participant is granted an annual opportunity for a payment if performance targets are achieved.

Performance targets are based on the nature of the participant’s role and amount of time in that role, achievement of hurdle rates, and targets and/or growth in one or more business criteria that apply to the individual participant, one or more business units or the Company as a whole.

The business criteria may include, individually or in combination:

(i) net earnings;

(ii) earnings per share;

(iii) net sales;

(iv) market share;

(v) net operating profit;

(vi) expense control;

(vii) return on invested capital;

(viii) operating margin;

(ix) return on equity;

(x) return on assets;

(xi) planning accuracy (as measured by comparing planned results to actual results);

(xii) gross margin;

(xiii) market price per share;

(xiv) total return to stockholders;

(xv) ESG measures;

and (xvi) any other measure determined by the Committee.

In addition, the annual performance targets may include comparisons to performance at other companies, such performance to be measured by one or more of the foregoing business criteria.

Furthermore, the measurement of performance against targets may exclude or adjust for the impact of certain events or occurrences as set forth in the Plan.

In no event may a participant receive more than $10 million under the Plan on account of any fiscal year.

Payouts pursuant to opportunities granted under the Plan occur following approval by the Committee of achievement.

Payouts are in cash (unless otherwise determined by the Committee) as soon as practicable following approval by the Committee, but not later than December 31 of the calendar year in which the applicable fiscal year ends.

The Committee may determine that the payout of an opportunity or a portion of an opportunity shall be deferred and may also allow voluntary deferrals in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “IRC”).

In the event a participant’s employment is terminated prior to the payout of an opportunity previously granted, the Plan provides for payment under certain circumstances as specified in the Plan.

Payouts are subject to repayment by a participant to the Company in accordance with the Company’s recoupment, recovery or clawback policy or policies in effect from time to time.

The Plan is subject to amendment or termination at any time by the Committee but no such action may adversely affect any rights or obligations with respect to any opportunities previously granted under the Plan.

The foregoing brief description of the terms and conditions of the Plan is qualified in its entirety by reference to the full text of the Plan, a copy of which is attached as Exhibit 10.5a hereto, and is incorporated into this Item by reference.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Class A plus Class B) would increase 6% to 378,086,144.

All outstanding options to purchase shares of Class A Common Stock, have an exercise price less than $254.67, the closing price on June 30, 2022.

Of the outstanding options to purchase 7,497,084 shares of Class A Common Stock, options to purchase 3,354,289 shares have an exercise price less than $196.38, the closing price on June 30, 2023.

Assuming the exercise of only in-the-money options, the total shares outstanding would increase by 1% to 360,974,204.

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4.28 Form of Global Note for the 1.950% Senior Notes due 2031 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on March 4, 2021) (SEC File No.

4.29 Officers’ Certificate, dated May 12, 2023, defining certain terms of the 4.375% Senior Notes due 2028 (filed as Exhibit 4.1 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No.

4.30 Form of Global Note for the 4.375% Senior Notes due 2028 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No.

4.31 Officers’ Certificate, dated May 12, 2023, defining certain terms of the 4.650% Senior Notes due 2033 (filed as Exhibit 4.3 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No.

4.32 Form of Global Note for the 4.650% Senior Notes due 2033 (included as Exhibit A in Exhibit 4.3 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No.

4.33 Officers’ Certificate, dated May 12, 2023, defining certain terms of the 5.150% Senior Notes due 2053 (filed as Exhibit 4.5 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No.

4.34 Form of Global Note for the 5.150% Senior Notes due 2053 (included as Exhibit A in Exhibit 4.5 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No.

10.1 Stockholders’ Agreement, dated November 22, 1995 (filed as Exhibit 10.1 to our Annual Report on Form 10-K filed on September 15, 2003) (SEC File No.

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7 to Stockholders’ Agreement (filed as Exhibit 10.7 to our Quarterly Report on Form 10-Q filed on October 30, 2009) (SEC File No.

Number Description

10.2 Registration Rights Agreement, dated November 22, 1995 (filed as Exhibit 10.2 to our Annual Report on Form 10-K filed on September 15, 2003) (SEC File No.

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10.2d Fourth Amendment to Registration Rights Agreement (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on January 29, 2004) (SEC File No.

Number Description

10.3 The Estee Lauder Companies Retirement Growth Account Plan, as amended and restated, effective as of January 1, 2019, as further amended through January 1, 2022 (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on February 3, 2022) (SEC File No.

10.3a Amendment to amended and restated The Estee Lauder Companies Retirement Growth Account Plan, effective as of May 31, 2022 (filed as Exhibit 10.1 on our Quarterly Report on Form 10-Q filed on May 3, 2022) (SEC File No.

10.3b The Estee Lauder Companies Retirement Growth Account Plan, as amended and restated, effective as of January 1, 2023 (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on February 2, 2023) (SEC File No.

10.4 The Estee Lauder Inc.

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10.5 Executive Annual Incentive Plan (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on November 14, 2013) (SEC File No.

10.5a Executive Annual Incentive Plan (SEC File No.

10.6 Employment Agreement with Tracey T.

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Lauder (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on February 27, 2013) (SEC File No.

Number Description

10.9 Employment Agreement with Fabrizio Freda (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on February 11, 2011) (SEC File No.

10.9a Amendment to Employment Agreement with Fabrizio Freda and Stock Option Agreements (filed as Exhibit 10.2 to our Current Report on Form 8-K filed on February 27, 2013) (SEC File No.

10.10 Employment Agreement with John Demsey (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on September 24, 2010) (SEC File No.

10.10a Amendment to Employment Agreement with John Demsey (filed as Exhibit 10.3 to our Current Report on Form 8-K filed on February 27, 2013) (SEC File No.

10.11 Employment Agreement with Cedric Prouvé (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on September 20, 2011) (SEC File No.

10.11a Amendment to Employment Agreement with Cedric Prouvé (filed as Exhibit 10.4 to our Current Report on Form 8-K filed on February 27, 2013) (SEC File No.

10.12 Employment Agreement with Deirdre Stanley filed as Exhibit 10.12 to our Annual Report on Form 10-K filed on August 28, 2020) (SEC File No.

10.12a Amendment to Employment Agreement with Deirdre Stanley filed as Exhibit 10.12a to our Annual Report on Form 10-K filed on August 28, 2020) (SEC File No.

Number Description

10.13 Employment Agreement with Jane Hertzmark Hudis (SEC File No.

10.10 Employment Agreement with Jane Hertzmark Hudis (filed as Exhibit 10.13 to our Annual Report on Form 10-K filed on August 24, 2022) (SEC File No.

10.11 Employment Agreement with Jane Lauder (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on May 3, 2023) (SEC File No.

10.12 Employment Agreement with Peter Jueptner (SEC File No.

10.13 Form of Deferred Compensation Agreement (interest-based) with Outside Directors (filed as Exhibit 10.14 to our Annual Report on Form 10-K filed on September 17, 2001) (SEC File No.

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Amended and Restated Fiscal 2002 Share Incentive Plan (filed as Exhibit 10.17 to our Annual Report on Form 10-K filed on August 17, 2012) (SEC File No.

Number Description

10.18a The Estée Lauder Companies Inc.

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Amended and Restated Fiscal 2002 Share Incentive Plan (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on November 19, 2019) (SEC File No.

Number Description

10.18d Form of Stock Option Agreement under The Estée Lauder Companies Inc.

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10.18e Form of Stock Option Agreement under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November 2, 2012) (SEC File No.

10.19f Form of Stock Option Agreement under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.16y to our Annual Report on Form 10-K filed on August 20, 2014) (SEC File No.

10.19g Form of Stock Option Agreement with Fabrizio Freda under The Estée Lauder Companies Inc.

10.18f Form of Stock Option Agreement with Fabrizio Freda under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.16z to our Annual Report on Form 10-K filed on August 20, 2014) (SEC File No.

10.19h Form of Stock Option Agreement under The Estée Lauder Companies Inc.

10.18g Form of Stock Option Agreement under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.16m to our Annual Report on Form 10-K filed on August 25, 2017) (SEC File No.

10.19i Form of Stock Option Agreement under The Estée Lauder Companies Inc.

10.18h Form of Stock Option Agreement under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.17l to our Annual Report on Form 10-K filed on August 23, 2019) (SEC File No.

10.19j Performance Share Unit Award Agreement with Fabrizio Freda under The Estée Lauder Companies Inc.

10.18i Performance Share Unit Award Agreement with Fabrizio Freda under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Notice of Grant) (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on September 11, 2015) (SEC File No.

10.19k Performance Share Unit Award Agreement with Fabrizio Freda (2018) under The Estée Lauder Companies Inc.

10.18j Performance Share Unit Award Agreement with Fabrizio Freda (2018) under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Notice of Grant) (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on February 15, 2018) (SEC File No.

10.19l Form of Performance Share Unit Award Agreement for Employees including Executive Officers under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.17u to our Annual Report on Form 10-K filed on August 24, 2018) (SEC File No.

10.19m Form of Performance Share Unit Award Agreement for Employees including Executive Officers under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.17t to our Annual Report on Form 10-K filed on August 23, 2019) (SEC File No.

10.19n Form of Performance Share Unit Award Agreement for Employees including Executive Officers under The Estée Lauder Companies Inc.

10.18k Form of Performance Share Unit Award Agreement for Employees including Executive Officers under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November 2, 2020) (SEC File No.

10.19o Price-Vested Unit Award Agreement with Fabrizio Freda under The Estée Lauder Companies Inc.

10.18l Price-Vested Unit Award Agreement with Fabrizio Freda under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Notice of Grant) (filed as Exhibit 10.1 to our current Report on Form 8-K filed on March 16, 2021) (SEC File No.

10.19p Performance Share Unit Award Agreement with Fabrizio Freda under The Estée Lauder Companies Inc.

10.18m Performance Share Unit Award Agreement with Fabrizio Freda under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Notice of Grant) (filed as Exhibit 10.2 to our Current Report on Form 8-K filed on March 16, 2021) (SEC File No.

10.19q Form of Non-annual Performance Share Unit Award Agreement for Executive Officers under The Estée Lauder Companies Inc.

10.18n Form of Non-annual Performance Share Unit Award Agreement for Executive Officers under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.18s to our Annual Report on Form 10-K filed on August 27, 2021) (SEC File No.

10.19r Form of Performance Share Unit Award Agreement for Employees including Executive Officers under The Estée Lauder Companies Inc.

10.18o Form of Performance Share Unit Award Agreement for Employees including Executive Officers under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.18t to our Annual Report on Form 10-K filed on August 27, 2021) (SEC File No.

Number Description

10.19s Form of Restricted Stock Unit Award Agreement under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.17y to our Annual Report on Form 10-K filed on August 23, 2019) (SEC File No.

10.19t Form of Restricted Stock Unit Award Agreement for Executive Officers under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.17z to our Annual Report on Form 10-K filed on August 23, 2019) (SEC File No.

10.19u Form of Restricted Stock Unit Award Agreement for Employees other than Executive Officers under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.17aa to our Annual Report on Form 10-K filed on August 23, 2019) (SEC File No.

10.19v Form of Restricted Stock Unit Award Agreement for Executive Officers under The Estée Lauder Companies Inc.

10.18p Form of Restricted Stock Unit Award Agreement for Executive Officers under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.18bb to our Annual Report on Form 10-K filed on August 28, 2020) (SEC File No.

10.19w Form of Restricted Stock Unit Award Agreement for Employees other than Executive Officers under The Estée Lauder Companies Inc.

10.18q Form of Restricted Stock Unit Award Agreement for Employees other than Executive Officers under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.18cc to our Annual Report on Form 10-K filed on August 28, 2020) (SEC File No.

10.19x Form of Non-annual Restricted Stock Unit Award Agreement for Executive Officers under The Estée Lauder Companies Inc.

Number Description

10.18r Form of Non-annual Restricted Stock Unit Award Agreement for Executive Officers under The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.18dd to our Annual Report on Form 10-K filed on August 28, 2020) (SEC File No.

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Lauder (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on January 28, 2010) (SEC File No.

10.21a Agreement of Sublease, dated May 18, 2022, between Editions de Parfums LLC, Sublandlord and Melville Management Corporation, Subtenant (SEC File No.

10.20a Agreement of Sublease, dated May 18, 2022, between Editions de Parfums LLC, Sublandlord and Melville Management Corporation, Subtenant (filed as Exhibit 10.21a to our Annual Report on Form 10-K filed on August 24, 2022) (SEC File No.

10.21 Services Agreement, dated November 22, 1995, between Estee Lauder Inc.

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and Aerin Lauder Zinterhofer (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on April 8, 2011) (SEC File No.

Number Description

10.24a First Amendment to Creative Consultant Agreement between Estee Lauder Inc.

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21.1 List of significant subsidiaries.

Number Description

23.1 Consent of PricewaterhouseCoopers LLP.

23.2 Consent of KPMG LLP.

24.1 Power of Attorney.

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Charlene Barshefsky

ROSE MARIE BRAVO* Director August 24, 2022

Rose Marie Bravo

WEI SUN CHRISTIANSON* Director August 18, 2023

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Report of Independent Registered Public Accounting Firm ( PricewaterhouseCoopers LLP , New York, New York , Auditor Firm ID:

Report of Independent Registered Public Accounting Firm ( KPMG LLP , New York, New York , Auditor Firm ID:

Consolidated Statements of Earnings

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We have audited the accompanying consolidated balance sheets of The Estée Lauder Companies Inc.

and its subsidiaries (the “Company”) as of June 30, 2022 and 2021, and the related consolidated statements of earnings, of comprehensive income, of equity and redeemable noncontrolling interest and of cash flows for each of the two years in the period ended June 30, 2022, including the related notes and schedule of valuation and qualifying accounts for each of the two years in the period ended June 30, 2022 appearing on page S-1 (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of June 30, 2023 and 2022, and the related consolidated statements of earnings, of comprehensive income, of equity and redeemable noncontrolling interest and of cash flows for each of the three years in the period ended June 30, 2023, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended June 30, 2023 appearing on page S-1 (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of June 30, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2022 in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2023 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Interim and Annual Goodwill and Indefinite-Lived Intangible Assets Impairment Assessments - DECIEM Reporting Unit

As described in Notes 2 and 6 to the consolidated financial statements, the Company’s consolidated balance of goodwill and indefinite-lived intangible assets was $2,521 million and $1,992 million, respectively, as of June 30, 2022, of which a significant portion relates to the DECIEM reporting unit and indefinite-lived trademarks.

Management assesses goodwill and other indefinite-lived intangible assets at least annually for impairment as of the beginning of the fiscal fourth quarter or more frequently if certain events or circumstances exist.

Management concluded that the changes in circumstances in the reporting units triggered the need for interim impairment reviews of the Company’s trademarks and goodwill.

Accordingly, management performed interim impairment tests as of February 28, 2022.

To determine the estimated fair value of the reporting units, management uses an equal weighting of the income and market approach.

To determine the estimated fair value of other indefinite-lived intangible assets, management uses an income approach, specifically the relief-from-royalty method.

The significant assumptions used in these approaches include revenue growth rates and profit margins, and the weighted-average cost of capital used to discount future cash flows for goodwill, and revenue growth rates, the weighted-average cost of capital to discount future cash flows, and royalty rates for trademarks.

The principal considerations for our determination that performing procedures relating to the interim and annual goodwill and indefinite-lived intangible assets impairment assessments - DECIEM reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the reporting unit and indefinite-lived trademarks;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates and profit margins, and weighted-average cost of capital for goodwill, and revenue growth rates, weighted-average cost of capital, and royalty rates for trademarks;

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Interim Goodwill Impairment Assessment - Dr.Jart+ Reporting Unit

As described in Notes 2 and 6 to the consolidated financial statements, the Company’s consolidated balance of goodwill was $2,486 million as of June 30, 2023, of which $304 million relates to the Dr.Jart+ reporting unit.

Management assesses goodwill at least annually for impairment as of the beginning of the fiscal fourth quarter or more frequently if certain events or circumstances exist.

Management concluded that the changes in circumstances in the reporting unit, along with increases in the weighted average cost of capital, triggered the need for an interim impairment review of the Company’s goodwill.

Management completed an interim quantitative impairment test for goodwill as of November 30, 2022.

The fair value of the reporting unit was based upon an equal weighting of the income and market approaches.

The significant assumptions used in these approaches include revenue growth rates and profit margins, terminal values, weighted average cost of capital used to discount future cash flows, and comparable market multiples.

The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessment - Dr.Jart+ reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting unit;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill and indefinite-lived intangible assets impairment assessments, including controls over the valuation of the DECIEM reporting unit and trademarks.

These procedures also included, among others, (i) testing management’s process for developing the fair value estimates;

(ii) evaluating the appropriateness of the income and relief-from-royalty approaches;

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Dr.Jart+ reporting unit.

These procedures also included, among others, (i) testing management’s process for developing the fair value estimate of the reporting unit;

(ii) evaluating the appropriateness of the income and market approaches;

(iii) testing the completeness and accuracy of the underlying data used in the approaches;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates and profit margins, weighted-average cost of capital, and royalty rates.

Evaluating management’s assumptions related to revenue growth rates and profit margins involved evaluating whether the assumptions were reasonable considering (i) the current and past performance of the brand;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates and weighted average cost of capital.

Evaluating management’s assumption related to revenue growth rates involved evaluating whether the assumption was reasonable considering (i) the current and past performance of the reporting unit;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income and relief-from-royalty approaches, and (ii) the reasonableness of the weighted-average cost of capital and royalty rates assumptions.

and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income approach and (ii) the reasonableness of the weighted average cost of capital significant assumption.

Acquisition of 001 Del LLC - Valuation of TOM FORD Trademark Intangible Asset

As described in Notes 2, 5, and 6 to the consolidated financial statements, on April 28, 2023, the Company acquired 100% of the equity interests in 001 Del LLC, the sole owner of the TOM FORD brand and its related intellectual property.

The acquisition has been accounted for as an asset acquisition as the fair value of the gross assets acquired is concentrated in the value of the TOM FORD trademark intangible asset.

The Company recognizes assets acquired in an asset acquisition based on the cost to the Company on a relative fair value basis.

The fair value of the trademark was determined using an income approach, specifically the relief-from-royalty method.

The significant assumptions used to estimate the fair value were revenue growth rates, terminal value, beauty royalty savings, weighted average cost of capital used to discount future cash flows, and royalty rates.

The total cost of the asset acquisition of $2,578 million was allocated to the TOM FORD trademark intangible asset.

The principal considerations for our determination that performing procedures relating to the valuation of the TOM FORD trademark intangible asset from the acquisition of 001 Del LLC is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the trademark intangible asset acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to terminal value, beauty royalty savings, and weighted average cost of capital;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition, including controls over the valuation of the trademark intangible asset.

These procedures also included, among others, (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimate;

(iii) evaluating the appropriateness of the relief-from-royalty method;

(iv) testing the completeness and accuracy of the underlying data used in the method;

and (v) evaluating the reasonableness of the significant assumptions used by management related to terminal value, beauty royalty savings, and weighted average cost of capital.

Evaluating management’s assumptions related to terminal value and beauty royalty savings involved evaluating whether the assumptions were reasonable considering (i) the current and past performance of the brand;

(ii) the consistency with external market data and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the relief-from-royalty method and (ii) the reasonableness of the weighted average cost of capital significant assumption.

/s/ PricewaterhouseCoopers LLP

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We have served as the Company’s auditor since 2020.

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

THE ESTÉE LAUDER COMPANIES INC.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statement of earnings, comprehensive income, equity, and cash flow for the year ended June 30, 2020, and the related notes and financial statement schedule (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2020, and the results of its operations and its cash flows for the year ended June 30, 2020, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We served as the Company’s auditor from 2002 to 2020.

New York, New York

August 28, 2020

THE ESTÉE LAUDER COMPANIES INC.

CONSOLIDATED STATEMENTS OF EARNINGS

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Net cash flow hedge gain (loss) ( 11 ) 91 ( 21 )

Cross-currency swap contract loss ( 20 ) — —

Retirement plan and other retiree benefit adjustments ( 79 ) 87 82

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( 13,631 ) ( 13,362 )

Total stockholders’ equity – The Estée Lauder Companies Inc.

Noncontrolling interests — 34

Total equity 5,585 5,590

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Year Ended June 30

(In millions) 2022 2021 2020

(In millions, except per share data) 2023 2022 2021

Common stock, beginning of year $ 6 $ 6 $ 6

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Increase (decrease) in other accrued and noncurrent liabilities ( 129 ) 1 695

Increase (decrease) in operating lease assets and liabilities, net ( 52 ) ( 56 ) 56

Decrease in operating lease assets and liabilities, net ( 41 ) ( 52 ) ( 56 )

Net cash flows provided by operating activities 1,731 3,040 3,631

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Payments for acquired businesses, net of cash acquired — ( 3 ) ( 1,065 )

Purchases of other intangible assets ( 2,286 ) — —

Purchases of investments ( 8 ) ( 10 ) ( 42 )

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Cash flows from financing activities

Proceeds (repayments) of current debt, net ( 4 ) ( 744 ) 755

Proceeds (repayments) of current debt, net (Note 11) 983 ( 4 ) ( 744 )

Proceeds from issuance of long-term debt, net 1,995 — 596

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Products are marketed under owned brand names, including:

Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, Bobbi Brown , La Mer , Aveda, Jo Malone London, Bumble and bumble, Darphin, Smashbox, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, Kilian Paris, Too Faced, Dr.Jart+, DECIEM and The Ordinary.

Certain subsidiaries of The Estée Lauder Companies Inc.

are also the global licensee of brand names for fragrances and/or cosmetics, including Tom Ford and AERIN.

Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, La Mer, Bobbi Brown Cosmetics , Aveda, Jo Malone London, Bumble and bumble, Darphin Paris, TOM FORD, Smashbox, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, Kilian Paris, Too Faced, Dr.Jart+, and The Ordinary.

The Estée Lauder Companies Inc.

is also the global licensee of the AERIN and BALMAIN brand names for fragrances and cosmetics.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses reported in those financial statements.

Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, pension and other post-retirement benefit costs, business combinations, goodwill, other intangible assets and long-lived assets, income taxes, redeemable noncontrolling interest and Deciem Beauty Group Inc.

Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, pension and other post-retirement benefit costs, business combinations and asset acquisitions, goodwill, other intangible assets and long-lived assets, income taxes, redeemable noncontrolling interest and Deciem Beauty Group Inc.

(“DECIEM”) stock options.

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As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions.

Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment, including those related to the impacts of the COVID-19 pandemic, will be reflected in the consolidated financial statements in future periods.

Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.

Currency Translation and Transactions

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The Company enters into foreign currency forward contracts and may enter into option contracts to hedge foreign currency transactions for periods consistent with its identified exposures.

The Company also enters into foreign currency forward contracts to hedge a portion of its net investment in certain foreign operations, which are designated as net investment hedges.

The Company also uses cross-currency swap contracts to hedge the impact of foreign currency changes on certain intercompany foreign currency denominated debt.

Additionally, the Company enters into foreign currency forward contracts to hedge a portion of its net investment in certain foreign operations, which are designated as net investment hedges.

See Note 12 – Derivative Financial Instruments for further discussion .

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Investments in the common stock of privately-held companies in which the Company has the ability to exercise significant influence, but less than a controlling financial interest, are accounted for under the equity method of accounting.

The Company accounts for its equity securities without readily determinable fair values at cost, less impairment, plus/minus subsequent observable price changes, and performs an assessment each quarter to determine whether or not a triggering event has occurred that results in changes in fair value.

These investments and its equity method investments were not material to the Company’s consolidated financial statements as of June 30, 2022 and 2021 and are included in Long-term investments in the accompanying consolidated balance sheets.

For those equity securities without readily determinable fair values where the Company does not have the ability to exercise significant influence, the Company records them at cost, less impairment, plus/minus subsequent observable price changes, and performs an assessment each quarter to determine whether or not a triggering event has occurred that results in changes in fair value.

Collectively, these investments were not material to the Company’s consolidated financial statements as of June 30, 2023 and 2022 and are included in Other assets in the accompanying consolidated balance sheets.

Accounts Receivable

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Payment terms are short-term in nature and are generally less than one year.

During fiscal 2021, the Company adopted Accounting Standards Codification (“ASC”) Topic 326 – Financial Instruments – Credit Losses (“ASC 326”) and is required to measure credit losses based on the Company’s estimate of expected losses rather than incurred losses, which generally results in earlier recognition of allowances for credit losses.

In accordance with ASC 326, the Company evaluates certain criteria, including aging and historical write-offs, current economic condition of specific customers and future economic conditions of countries utilizing a consumption index to determine the appropriate allowance for credit losses.

The Company is required to measure credit losses based on the Company’s estimate of expected losses rather than incurred losses, which generally results in earlier recognition of allowances for credit losses.

The Company evaluates certain criteria, including aging and historical write-offs, the current economic condition of specific customers and future economic conditions of countries utilizing a consumption index to determine the appropriate allowance for credit losses.

The Company writes-off receivables once it is determined that the receivables are no longer collectible and as allowed by local laws.

As a result of the adoption of ASC 326, the Company recorded a cumulative adjustment of approximately $ 3 million, net of tax, as a reduction to its fiscal 2021 opening balance of retained earnings relating to its trade receivables.

See Note 14 – Revenue Recognition for additional information.

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Leasehold improvements are amortized on a straight-line basis over the shorter of the lives of the respective leases or the expected useful lives of those improvements.

Business Combinations

Business Combinations and Asset Acquisitions

The Company evaluates whether a transaction meets the definition of a business.

The Company first applies a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

If the screen test is met, the transaction is accounted for as an asset acquisition.

If the screen test is not met, the Company further considers whether the set of assets or acquired entities have at a minimum, inputs and processes that have the ability to create outputs in the form of revenue.

If the assets or acquired entities meet this criteria, the transaction is accounted for as a business combination.

The Company uses the acquisition method of accounting for acquired businesses.

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Any residual purchase price is recorded as goodwill.

The Company recognizes assets acquired in an asset acquisition based on the cost to the Company on a relative fair value basis, which includes transaction costs in addition to consideration transferred and liabilities assumed or issued as part of the transaction.

Neither goodwill nor bargain purchase gains are recognized in an asset acquisition;

any excess of consideration transferred over the fair value of the net assets acquired, or the opposite, is allocated to qualifying assets based on their relative fair values.

The determination of fair value, as well as the expected useful lives of certain assets acquired, requires management to make judgments and may involve the use of significant estimates, including assumptions with respect to estimated future cash flows, discount rates and valuation multiples from comparable publicly traded companies, among other things.

See Note 5 – Acquisition of Businesses for further information.

See Note 5 – Business and Asset Acquisitions for further information.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and Other Indefinite-lived Intangible Assets

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Goodwill and other indefinite-lived intangible assets are not amortized.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company assesses goodwill and other indefinite-lived intangible assets at least annually for impairment as of the beginning of the fiscal fourth quarter or more frequently if certain events or circumstances exist.

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If the carrying value exceeds the fair value, an impairment charge is recorded.

For fiscal 2022, the Company elected to perform the quantitative assessment for the goodwill in each of its reporting units and indefinite-lived intangible assets.

The Company engaged a third-party valuation specialist and used industry accepted valuation models and criteria that were reviewed and approved by various levels of management.

To determine the estimated fair value of the reporting units, the Company used an equal weighting of the income and market approaches.

Under the income approach, the Company determined fair value using a discounted cash flow method, projecting future cash flows of each reporting unit, as well as a terminal value, and discounting such cash flows at a rate of return that reflected the relative risk of the cash flows.

Under the market approach, the Company utilized market multiples from publicly traded companies with similar operating and investment characteristics as the reporting unit.

The significant assumptions used in these two approaches include revenue growth rates and profit margins, terminal value, the weighted-average cost of capital used to discount future cash flows and comparable market multiples.

To determine the estimated fair value of other indefinite-lived intangible assets, the Company used an income approach, specifically the relief-from-royalty method.

This method assumes that, in lieu of ownership, a third-party would be willing to pay a royalty in order to obtain the rights to use the comparable asset.

The significant assumptions used in this approach include revenue growth rates, terminal value, the weighted-average cost of capital used to discount future cash flows and royalty rate.

For fiscal 2021, the Company elected to perform the qualitative assessment for the goodwill in certain of its reporting units and indefinite-lived intangible assets.

This qualitative assessment included the review of certain macroeconomic factors and entity-specific qualitative factors to determine if it was more-likely-than-not that the fair values of its reporting units were below carrying value.

The Company considered macroeconomic factors including the global economic growth, general macroeconomic trends for the markets in which the reporting units operate and the intangible assets are employed, and the growth of the global prestige beauty industry.

In addition to these macroeconomic factors, among other things, the Company considered the reporting units’ current results and forecasts, any changes in the nature of the business, any significant legal, regulatory, contractual, political or other business climate factors, changes in the industry/competitive environment, changes in the composition or carrying amount of net assets and its intention to sell or dispose of a reporting unit or cease the use of a trademark.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For fiscal 2021, a quantitative assessment was performed for the Company’s other reporting units and other indefinite-lived intangible assets.

The Company engaged third-party valuation specialists and used industry accepted valuation models and criteria that were reviewed and approved by various levels of management.

To determine the estimated fair value of the reporting units, the Company used an equal weighting of the income and market approaches.

Under the market approach, the Company utilized market multiples from publicly traded companies with similar operating and investment characteristics as the reporting unit.

To determine the estimated fair value of other indefinite-lived intangible assets, the Company used an income approach, specifically the relief-from-royalty method.

This method assumes that, in lieu of ownership, a third-party would be willing to pay a royalty in order to obtain the rights to use the comparable asset.

The significant assumptions used in this approach include revenue growth rates, terminal value, the weighted-average cost of capital used to discount future cash flows and royalty rate.

See Note 6 – Goodwill and Other Intangible Assets for further information.

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In addition, significant changes in events or circumstances within the Company’s control are assessed to determine whether a change in the accounting for leases is required.

For lease modifications that result in partial termination of the lease, the Company has elected the proportional method whereby the carrying amount of the ROU asset is decreased in proportion with the full or partial termination of the lease based on the adjustment to the carrying value of the lease liability.

The difference between those adjustments is recognized in Selling, general and administrative expense in the accompanying consolidated statements of earnings at the effective date of the termination.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The difference between those adjustments is recognized in Selling, general and administrative expense in the accompanying consolidated statements of earnings at the effective date of the termination.

Certain of the Company’s leases provide for variable lease payments for the right to use an underlying asset that vary due to changes in facts and circumstances occurring after the commencement date, other than the passage of time.

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leases with a term of 12 months or less) are not recorded as ROU assets or lease liabilities on the Company’s consolidated balance sheets, and the related lease payments are recognized in net earnings on a straight-line basis over the lease term.

For certain leases relating to automobiles, information technology equipment and office equipment, the Company applies the guidance of ASC Topic 842 – Leases ("ASC 842") utilizing a portfolio approach.

Under this approach, the Company combined and accounted for leases (as a portfolio) with similar characteristics (e.g., lease term, discount rates, etc.) as a single lease, provided its application is not materially different when compared to the application at the individual lease level.

For certain leases relating to automobiles, information technology equipment and office equipment, the Company utilizes the portfolio approach.

Under this approach, the Company combines and accounts for leases (as a portfolio) with similar characteristics (e.g., lease term, discount rates, etc.) as a single lease, provided its application is not materially different when compared to the application at the individual lease level.

See Note 7 – Leases for further information.

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The Company grants credit to qualified customers.

As a result of the COVID-19 pandemic, the Company has enhanced its assessment of its customers' abilities to pay with a greater focus on factors affecting their liquidity and less on historical payment performance.

While the Company does not believe it is exposed significantly to any undue concentration of credit risk at this time, it continues to monitor the extent of the impact of the COVID-19 pandemic on its customers' abilities, individually and collectively, to make timely payments.

The Company’s largest customer for the year ended June 30, 2022 sells products primarily in China travel retail.

This customer accounted for $ 2,232 million or 13 %, $ 2,278 million or 14 % and $ 1,031 million or 7 % of the Company's consolidated net sales for the year ended June 30, 2022, 2021 and 2020, respectively.

This customer accounted for $ 399 million, or 24 %, and $ 179 million, or 10 %, of the Company's accounts receivable at June 30, 2022 and 2021, respectively.

While the Company does not believe it is exposed significantly to any undue concentration of credit risk at this time, it continues to monitor its customers' abilities, individually and collectively, to make timely payments.

Revenue Recognition

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The Company recognizes revenue at a point in time when it satisfies a performance obligation by transferring control over a product and other promised goods and services to a customer.

The Company sells wholesale to customers in distribution channels that include department stores, travel retail, specialty-multi retailers, perfumeries, salons/spas and through various online sites operated by authorized retailers.

The primary performance obligation related to these channels of distribution is product sales where revenue is recognized as control of the product transfers to the customer.

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In connection with the sale of product, the Company may provide other promised goods and services that are deemed to be performance obligations.

These are comprised of customer loyalty program obligations, gift with purchase and purchase with purchase promotions, gift cards and other promotional goods including samples and testers.

These are comprised of gift with purchase and purchase with purchase promotions, customer loyalty program obligations, gift cards and other promotional goods including samples and testers.

The Company offers a number of different loyalty programs to its customers across regions, brands and distribution channels including points-based programs, tier-based programs and other programs.

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For revenue disaggregated by product category and geographic region, see Note 22 – Segment Data and Related Information .

Royalty Revenue - License Arrangements

As a result of the acquisition of the TOM FORD brand, the Company entered into license arrangements with the Marcolin Group (“Marcolin”) and Ermenegildo Zegna N.V.

As part of these arrangements, the Company licensed the TOM FORD trademark for eyewear (“Eyewear”) to Marcolin and for fashionwear (“Fashion”) to Zegna.

Licensing the TOM FORD trademark to customers represents a new revenue-generating activity in the ordinary course of business for the Company.

The Company’s performance obligation is to license the TOM FORD trademark to Marcolin and to Zegna, which grants them the right to access the symbolic intellectual property.

The licensing arrangements stipulate that licensees must pay a sales-based royalty, with a guaranteed minimum, to the Company.

The Company satisfies its performance obligation over the license period, as the Company fulfills its promise to grant the licensees rights to use and benefit from the intellectual property as well as maintain the intellectual property.

As such, revenue for both the Marcolin and Zegna arrangements is recognized over time.

Royalty payments are collected on a quarterly basis.

The Company expects the guaranteed minimum royalty amounts to be exceeded and, as a result, sales-based royalties will be recognized in the period in which the sales occur.

The upfront payment received from Marcolin is recognized on a straight-line basis over the estimated economic life of the license.

See Note 5 – Business and Asset Acquisitions and Note 14 - Revenue Recognition for further information regarding the acquisition of the TOM FORD brand.

Advertising and Promotion

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Research and development costs of $ 344 million, $ 307 million and $ 243 million in fiscal 2023, 2022 and 2021, respectively, are recorded in Selling, general and administrative expenses in the accompanying consolidated statements of earnings and are expensed as incurred.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Shipping and Handling

Shipping and handling expenses of $ 838 million, $ 860 million and $ 680 million in fiscal 2023, 2022 and 2021, respectively, are recorded in Selling, general and administrative expenses in the accompanying consolidated statements of earnings and include distribution center costs, promotional shipping costs, third-party logistics costs and outbound freight.

License Arrangements

Royalty Fees - License Arrangements

The Company’s license agreements provide the Company with worldwide rights to manufacture, market and sell beauty and beauty-related products (or particular categories thereof) using the licensors’ trademarks.

The current licenses had an initial term of approximately 5 years to 10 years, and are renewable subject to the Company’s compliance with the license agreement provisions.

The current license arrangements have an initial term of approximately 5 years to 10 years, and are renewable subject to the Company’s compliance with the license agreement provisions.

As of June 30, 2023, the remaining terms considering available renewal periods range from 7 years to approximately 27 years.

Under each license, the Company is required to pay royalties to the licensor, at least annually, based on net sales to third parties.

Some of the Company’s licenses were entered into to create a new business, while other licenses were acquired, or entered into, where the licensor or another licensee was operating a pre-existing beauty products business, in which case, other intangible assets are capitalized and amortized over their useful lives.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Certain license agreements may require minimum royalty payments, incremental royalties based on net sales levels and minimum spending on advertising and promotional activities.

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Stock-Based Compensation

The Company records stock-based compensation, measured at the fair value of the awards that are ultimately expected to vest, as an expense in the consolidated financial statements and accrues for estimated forfeitures each quarter.

All excess tax benefits and tax deficiencies related to share-based compensation awards are recorded as income tax expense or benefit in the accompanying consolidated statements of earnings.

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The provision for income taxes includes the amounts payable or refundable for the current year, the effect of deferred taxes and impacts from uncertain tax positions.

The Company recognizes deferred tax assets and liabilities for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis, net operating losses, tax credits and other carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates when the assets and liabilities are expected to be realized or settled.

The Company regularly reviews deferred tax assets for realizability and establishes valuation allowances based on available evidence including historical operating losses, projected future taxable income, expected timing of the reversals of existing temporary differences, and appropriate tax planning strategies.

If the Company’s assessment of the realizability of a deferred tax asset changes, an increase to a valuation allowance will result in a reduction to net earnings at that time, while the reduction to a valuation allowance will result in an increase to net earnings at that time.

The Company provides tax reserves for applicable U.S.

If the Company’s assessment of the realizability of a deferred tax asset changes, an increase to a valuation allowance will result in a reduction of net earnings at that time, while the reduction of a valuation allowance will result in an increase of net earnings at that time.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company provides tax reserves for U.S.

federal, state, local and foreign tax exposures relating to periods subject to audit.

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The acquisition of additional shares increased the Company's equity interest and was considered a step acquisition.

As part of the increase in the Company's investment, the Company was granted the right to purchase (“Call Option”), and granted the remaining investors a right to sell to the Company (“Put Option”), the remaining interests after a three-year period, with a purchase price based on the future performance of DECIEM (the “net Put (Call) Option”).

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As a result of this redemption feature, the Company recorded redeemable noncontrolling interest, at its acquisition‑date fair value, that is classified as mezzanine equity in the accompanying consolidated balance sheets at June 30, 2021.

As part of the increase in the Company's investment, the Company was granted the right to purchase (“Call Option”), and granted the remaining investors a right to sell to the Company (“Put Option”), the remaining interests after a three-yea r period, with a purchase price based on the future performance of DECIEM (the “net Put (Call) Option”).

The noncontrolling interest is adjusted each reporting period for income (loss) attributable to the noncontrolling interest.

Each reporting period, a measurement period adjustment, if any, is then recorded to adjust the noncontrolling interest to the higher of either the redemption value, assuming it was redeemable at the reporting date, or its carrying value.

These adjustments are recorded in Paid-in capital and are not reflected in Net earnings (loss) or Net earnings (loss) attributable to The Estée Lauder Companies Inc.

If and when applicable, these adjustments are recorded in Paid-in capital and are not reflected in the accompanying consolidated statements of earnings.

In addition, based on the Company's policy election, if the redemption value exceeds the fair value of the noncontrolling interest on a cumulative basis, a measurement period adjustment is recorded in Retained earnings and the Company will adjust Net earnings (loss) attributable to The Estée Lauder Companies Inc.

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risk-free rate, term to mid of last twelve-month period, operating leverage adjustment, net sales discount rate, EBITDA discount rate, EBITDA volatility and net sales volatility.

See Note 5 – Acquisition of Businesses for additional information regarding the redeemable noncontrolling interest.

See Note 5 – Business and Asset Acquisitions for additional information regarding the redeemable noncontrolling interest.

Government Assistance

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Beginning in the second half of fiscal 2020, many governments in locations where the Company operates announced programs to assist employers whose businesses were impacted by the COVID-19 pandemic, including programs that provide rebates to incentivize employers to maintain employees on payroll who were unable to work for their usual number of hours.

During fiscal 2022, 2021 and 2020, the Company qualified for and recorded $ 12 million, $ 84 million and $ 99 million, respectively, in government assistance, which reduced Selling, general and administrative expenses by $ 9 million, $ 78 million and $ 87 million, respectively, and Cost of sales by $ 3 million, $ 6 million and $ 10 million, respectively.

The remaining $ 2 million recorded in fiscal 2020 was deferred and recognized in fiscal 2021 as a reduction to Cost of sales.

Recently Adopted Accounting Standards

Income Taxes (ASU 2019-12 – Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes)

In December 2019, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that simplifies the accounting for income taxes by removing certain exceptions and making simplifications in other areas.

Effective for the Company – Fiscal 2022 first quarter.

Impact on consolidated financial statements – On July 1, 2021, the Company adopted this standard and recorded a cumulative adjustment of $ 121 million as an increase to its fiscal 2022 opening retained earnings balance to derecognize a deferred tax liability related to a previously held equity method investment that became a foreign subsidiary.

During fiscal 2022 and 2021, the Company qualified for and recorded $ 12 million and $ 84 million, respectively, in government assistance, which reduced Selling, general and administrative expenses by $ 9 million and $ 78 million, respectively, and Cost of sales by $ 3 million and $ 6 million, respectively.

In fiscal 2023, the impact from government assistance programs was not material to the consolidated statement of earnings.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued Accounting Standards

2022-04 – Liabilities—Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations

In September 2022, the FASB issued authoritative guidance which is intended to enhance the transparency surrounding the use of supplier finance programs.

The guidance requires companies that use supplier finance programs to make annual disclosures about the program’s key terms, the balance sheet presentation of related amounts, the confirmed amount outstanding at the end of the period and associated rollforward information.

Only the amount outstanding at the end of the period must be disclosed in interim periods.

The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations.

Effective for the Company – The guidance becomes effective for the Company’s first quarter fiscal 2024 and is applied on a retrospective basis, except for the requirement to disclose rollforward information annually which is effective prospectively for the Company beginning in fiscal 2025.

Early adoption is permitted.

Annual disclosures, excluding the rollforward information, need to be provided in interim periods within the initial year of adoption.

Impact on consolidated financial statements – The Company has supplier financing arrangements and will apply the disclosure requirements as required by the amendments.

Reference Rate Reform (ASC Topic 848 “ ASC 848 ” )

In March 2020, the FASB issued authoritative guidance to provide optional relief for companies preparing for the discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”) and applies to lease and other contracts, hedging instruments, held-to-maturity debt securities and debt arrangements that reference LIBOR or another rate that is expected to be discontinued as a result of reference rate reform.

In January 2021, the FASB issued authoritative guidance that makes amendments to the new rules on accounting for reference rate reform.

The amendments clarify that for all derivative instruments affected by the changes to interest rates used for discounting, margining or contract price alignment, regardless of whether they reference LIBOR or another rate expected to be discontinued as a result of reference rate reform, an entity may apply certain practical expedients in ASC 848.

Effective for the Company – This guidance can be applied for a limited time through December 31, 2022.

The guidance will no longer be available to apply after December 31, 2022.

In March 2020, t he FAS B issued authoritative guidance to provide optional relief for companies preparing for the discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”) and applies to lease and other contracts, hedging instruments, held-to-maturity debt securities and debt arrangements that reference LIBOR or another rate that is expected to be discontinued as a result of reference rate reform.

In Janua ry 2021, the FASB issued authoritative guidance that makes amendments to the new rules on accounting for reference rate reform.

The amendments clar ify that for all derivative instruments affected by the changes to interest rates used for discounting, margining or contract price alignment, regardless of whether they reference LIBOR or another rate expected to be discontinued as a result of reference rate reform, an entity may apply certain practical expedients in ASC 848.

In December 2022, the FASB issued authoritative guidance to defer the sunset date of ASC 848 from December 31, 2022 to December 31, 2024.

Effective for the Company – This guidance can only be applied for a limited time through December 31, 2024.

Impact on consolidated financial statements – The Company completed its comprehensive evaluation of applying this guidance, and will adopt certain practical expedients for its interest rate swap agreements in the fiscal 2024 first quarter which is not expected to have a significant impact on its consolidated financial statements, including business processes and internal controls over financial reporting.

The practical expedients that will be adopted permit its hedging relationships to continue without de-designation upon changes due to reference rate reform.

Foreign currency forward contracts do not reference LIBOR and no practical expedients will be elected, but will be discounted using the Secured Overnight Financing Rate (SOFR).

For existing lease, debt arrangements and other contracts, the Company will not adopt any ASC 848 practical expedients as it relates to these arrangements.

No other recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impact on consolidated financial statements – The Company currently has an implementation team in place that is performing a comprehensive evaluation and assessing the impact of applying this guidance, which includes assessing the impact to business processes and internal controls over financial reporting and the related disclosure requirements.

For treasury related arrangements, the Company references LIBOR in its interest rate swap agreements and LIBOR is also used for purposes of discounting certain foreign currency and interest rate forward contracts.

The Company is currently evaluating the potential impact of modifying treasury related arrangements and applying the relevant ASC 848 optional practical expedients, as needed.

For existing lease, debt arrangements and other contracts, the Company does not expect any qualifying contract modifications related to reference rate reform and therefore does not expect that the optional guidance in ASC 848 will need to be applied through December 31, 2022.

The Company will continue to monitor new contracts that could potentially be eligible for contract modification relief through December 31, 2022.

No other recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements.

NOTE 3 – INVENTORY AND PROMOTIONAL MERCHANDISE

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Depreciation and amortization related to the Company’s manufacturing process is included in Cost of sales and all other depreciation and amortization is included in Selling, general and administrative expenses in the accompanying consolidated statements of earnings.

S ee Note 7 – Leases for discussion of property, plant and equipment impairments.

See Note 7 – Leases for d iscussion of property, plant and equipment impairments.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – ACQUISITION OF BUSINESSES

NOTE 5 – BUSINESS AND ASSET ACQUISITIONS

Asset Acquisition

On April 28, 2023, the Company acquired 100 % of the equity interests in 001 Del LLC (“001”) in exchange for $ 2,550 million in consideration (the “TOM FORD Acquisition”).

001 is the sole owner of the TOM FORD brand and its related intellectual property.

The TOM FORD brand is a luxury brand created in 2005, and this acquisition is expected to further strengthen the Company’s TOM FORD BEAUTY brand, which the Company has historically licensed, while simultaneously enabling the Company to create new licensing revenue streams.

At the same time as the Company's transaction, affiliates of the Ermenegildo Zegna Group (“Zegna”) separately purchased the interests in the TOM FORD fashion business that Zegna did not own (including the purchase of interests from the sellers of 001).

The TOM FORD Acquisition has been accounted for as an asset acquisition as the fair value of the gross assets acquired is concentrated in the value of the TOM FORD trademark intangible asset.

The acquisition of 001 included existing license relationships for certain uses of the brand name, which were modified, terminated or otherwise renegotiated in connection with the transaction, and are discussed separately in Note 14 – Revenue Recognition .

The total cost of the asset acquisition is $ 2,578 million, inclusive of approximately $ 28 million of transaction related costs and $ 300 million of deferred consideration payable to the sellers included in Other noncurrent liabilities in the accompanying consolidated balance sheets as of June 30, 2023.

Of the $ 300 million of deferred consideration payable to the sellers, $ 150 million is due in July 2025 and the remaining $ 150 million is due in July 2026.

The total cost of the asset acquisition was allocated to the TOM FORD trademark intangible asset.

The Company determined that the TOM FORD trademark intangible asset has an indefinite life, and will not be amortized, but will be subject to impairment assessment at least annually, or more frequently if certain events or circumstances exist.

Business Combination

On May 18, 2021, the Company acquired additional shares in DECIEM, a Toronto-based skin care company, for $ 1,092 million in cash, including proceeds from the issuance of debt.

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The accounting for the DECIEM business combination was finalized during the fiscal 2022 third quarter.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the total consideration transferred, including immaterial measurement period adjustments was finalized during the fiscal 2022 third quarter and recorded as follows:

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The acquisition-date fair value of the previously held equity method investment was calculated by multiplying the gross-up of the total consideration for the acquired ownership interest of $ 2,992 million by the related effective previously held equity interest of approximately 30.5 %.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The acquisition-date fair value of the redeemable noncontrolling interest includes the acquisition-date fair value of the net Put (Call) Option of $ 233 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On December 18, 2019, the Company acquired the remaining 66.66 % equity interest in Have&Be Co.

(“Have & Be”), the global skin care company behind Dr.Jart+ and men’s grooming brand Do The Right Thing, for $ 1,268 million in cash.

Based on the final purchase price and working capital adjustments, the Company estimated a refund receivable of $ 32 million that was outstanding as of June 30, 2020 and was received in fiscal 2021.

The Company originally acquired a minority interest in Have & Be in December 2015, and that investment structure included a formula-based call option for the remaining equity interest.

The original minority interest was accounted for as an equity method investment, which had a carrying value of $ 133 million at the acquisition date.

The acquisition of the remaining equity interest in Have & Be was considered a step acquisition, whereby the Company remeasured the previously held equity method investment to its fair value of $ 660 million, resulting in the recognition of a gain of $ 530 million.

The acquisition of the remaining equity interest also resulted in the recognition of a previously unrealized foreign currency gain of $ 4 million, which was reclassified from accumulated OCI.

The total gain on the Company’s previously held equity method investment of $ 534 million is included in Other income, net in the accompanying consolidated statements of earnings for fiscal 2020.

The fair value of the previously held equity method investment was determined based upon a valuation of the acquired business, as of the date of acquisition, using an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies.

The accounting for the Have & Be business combination was finalized as of June 30, 2020.

The amount paid at closing was funded by cash on hand including the proceeds from the issuance of debt.

In anticipation of the closing, the Company transferred cash to a foreign subsidiary for purposes of making the closing payment.

As a result, the Company recognized a foreign currency gain of $ 23 million, which is also included in Other income, net in the accompanying consolidated statements of earnings for the year ended June 30, 2020.

NOTE 6 – GOODWILL AND OTHER INTANGIBLE ASSETS

As previously discussed in Note 5 – Acquisition of Businesses , in May 2021 the Company increased its investment in DECIEM, which resulted in the inclusion of additional goodwill of $ 1,296 million, amortizable intangible assets (customer lists) of $ 701 million with amortization periods of 7 years to 14 years, and non-amortizable intangible assets (trademarks) of $ 1,216 million.

As previously discussed in Note 5 - Business and Asset Acquisitions , in April 2023, the Company completed the TOM FORD Acquisition and recorded a non-amortizable intangible asset (trademark) of $ 2,578 million.

The trademark acquired in connection with the TOM FORD Acquisition is classified as level 3 in the fair value hierarchy.

The fair value of the trademark was determined using an income approach, specifically the relief-from-royalty method.

This method assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to obtain the rights to use the comparable asset.

The significant assumptions used to estimate the fair value were revenue growth rates, terminal value, beauty royalty savings, the weighted average cost of capital used to discount future cash flows and royalty rates.

The most significant unobservable input was the weighted average cost of capital used to discount future cash flows.

Also as discussed in Note 5 - Business and Asset Acquisitions, in May 2021 the Company increased its investment in DECIEM, which resulted in the inclusion of additional goodwill of $ 1,296 million, amortizable intangible assets (customer lists) of $ 701 million with amortization periods of 7 years to 14 years, and non-amortizable intangible assets (trademarks) of $ 1,216 million.

Goodwill associated with the acquisition is primarily attributable to the future revenue growth opportunities associated with sales growth in the skin care category, as well as the value associated with DECIEM's assembled workforce.

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The goodwill recorded in connection with this acquisition is not deductible for tax purposes.

The intangible assets acquired in connection with the acquisition of DECIEM is classified as level 3 in the fair value hierarchy.

The intangible assets acquired in connection with the acquisition of DECIEM are classified as level 3 in the fair value hierarchy.

The estimate of the fair values of the acquired amortizable intangible assets were determined using a multi-period excess earnings income approach by discounting the incremental after-tax cash flows over multiple periods.

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1,645 384 232 355 2,616

Goodwill acquired during the year 1,283 6 — 4 1,293

Impairment charges (1)

( 54 ) ( 13 ) ( 4 ) — ( 71 )

Translation adjustments, goodwill ( 16 ) ( 2 ) 8 ( 38 ) ( 48 )

Translation adjustments, accumulated impairments 8 — — 33 41

Goodwill measurement period adjustment 13 — — — 13

Translation and other adjustments, goodwill ( 97 ) ( 98 ) ( 13 ) ( 2 ) ( 210 )

Translation and other adjustments, accumulated impairments 3 98 1 — 102

( 81 ) — ( 12 ) ( 2 ) ( 95 )

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1,564 384 220 353 2,521

Goodwill measurement period adjustment 13 — — — 13

Translation and other adjustments, goodwill ( 38 ) — 5 — ( 33 )

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$ 1,525 $ 384 $ 224 $ 353 $ 2,486

(1) Goodwill impairment charges of $ 13 million, recorded in connection with the exit of the global distribution of BECCA products, and $ 4 million, other, are included in Restructuring and other charges in the accompanying consolidated statements of earnings for the year ended June 30, 2021.

See Note 8 – Charges Associated with Restructuring and Other Activities for further information relating to the Post-COVID Business Acceleration Program.

See “ Fiscal 2021 Impairment Testing ” below for further information relating to fiscal 2021 impairment charges related to GLAMGLOW and Smashbox.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Intangible Assets

Other intangible assets include trademarks and patents, as well as license agreements and other intangible assets resulting from or related to businesses and assets purchased by the Company.

Other intangible assets primarily include trademarks and customer lists, as well as patents, and license arrangements resulting from or related to businesses and assets purchased by the Company.

Indefinite-lived intangible assets (e.g., trademarks) are not subject to amortization and are assessed at least annually for impairment during the fiscal fourth quarter or more frequently if certain events or circumstances exist.

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Intangible assets related to license agreements were amortized on a straight-line basis over their useful lives based on the terms of the respective agreements.

The costs incurred and expensed by the Company to extend or renew the term of acquired intangible assets during fiscal 2022 and 2021 were not significant to the Company’s results of operations.

The costs incurred and expensed by the Company to extend or renew the term of acquired intangible assets during fiscal 2023 and 2022 were not material to the Company’s results of operations.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other intangible assets consist of the following:

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Amortizable intangible assets:

Customer lists and other $ 2,061 $ 625 $ 1,436 $ 2,273 $ 544 $ 1,729

License agreements 3 3 — 43 43 —

$ 2,064 $ 628 1,436 $ 2,316 $ 587 1,729

Customer lists, license agreements and other $ 2,030 $ 766 $ 1,264 $ 2,064 $ 628 $ 1,436

Non-amortizable intangible assets:

Trademarks and other 1,992 2,366

Trademarks 4,338 1,992

Total intangible assets $ 5,602 $ 3,428

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Estimated aggregate amortization expense $ 146 $ 146 $ 146 $ 129 $ 104

Fiscal 2023 Impairment Analysis

For further policy information on the Company's policy relating to its impairment assessment of goodwill and other indefinite-lived intangible assets, see Goodwill and Other Indefinite-lived Intangible Assets within Note 2 – Summary of Significant Accounting Policies.

During the fiscal 2023 second quarter, given the lower-than-expected results in the overall business, the Company revised the internal forecasts relating to its Smashbox reporting unit.

The Company concluded that the changes in circumstances in the reporting unit triggered the need for an interim impairment review of its trademark intangible asset.

The remaining carrying value of the trademark intangible asset was not recoverable and the Company recorded an impairment charge of $ 21 million reducing the carrying value to zero .

During the fiscal 2023 second quarter, the Dr.Jart+ reporting unit experienced lower-than-expected growth within key geographic regions and channels that continue to be impacted by the spread of COVID-19 variants, resurgence in cases, and the potential future impacts relating to the uncertainty of the duration and severity of COVID-19 impacting the financial performance of the reporting unit.

In addition, due to macro-economic factors, Dr.Jart+ has experienced lower-than-expected growth within key geographic regions.

The Too Faced reporting unit experienced lower-than-expected results in key geographic regions and channels coupled with delays in future international expansion to areas that continue to be impacted by COVID-19.

As a result, the Company revised the internal forecasts relating to its Dr.Jart+ and Too Faced reporting units.

Additionally, there were increases in the weighted average cost of capital for both reporting units as compared to the prior year annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2022.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fiscal 2022 Impairment Testing

The Company concluded that the changes in circumstances in the reporting units, along with increases in the weighted average cost of capital, triggered the need for interim impairment reviews of their trademarks and goodwill.

These changes in circumstances were also an indicator that the carrying amounts of Dr.Jart+’s and Too Faced’s long-lived assets, including customer lists, may not be recoverable.

Accordingly, the Company performed interim impairment tests for the trademarks and a recoverability test for the long-lived assets as of November 30, 2022.

The Company concluded that the carrying value of the trademark intangible assets exceeded their estimated fair values, which were determined utilizing the relief-from-royalty method to determine discounted projected future cash flows and recorded an impairment charge of $ 100 million for Dr.Jart+ and $ 86 million for Too Faced.

The Company concluded that the carrying amounts of the long-lived assets were recoverable.

After adjusting the carrying values of the trademarks, the Company completed interim quantitative impairment tests for goodwill.

As the estimated fair value of the Dr.Jart+ and Too Faced reporting units were in excess of their carrying values, the Company concluded that the carrying amounts of the goodwill were recoverable and did not record a goodwill impairment charge related to these reporting units.

The fair values of these reporting units were based upon an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting units.

The most significant unobservable input used to estimate the fair values of the Dr.Jart+ and Too Faced trademark intangible assets was the weighted average cost of capital, which was 11 % and 13 %, respectively.

A summary of the impairment charges for the twelve months ended June 30, 2023 and the remaining trademark and goodwill carrying values as of June 30, 2023, for each reporting unit, are as follows:

Impairment Charges Carrying Value

(In millions) Twelve Months Ended

June 30, 2023 As of June 30, 2023

Reporting Unit Geographic Region Trademarks Goodwill Trademarks Goodwill

Smashbox The Americas $ 21 $ — $ — $ —

Dr.Jart+ Asia/Pacific 100 — 325 304

Too Faced The Americas 86 — 186 13

Total $ 207 $ — $ 511 $ 317

The impairment charges for the twelve months ended June 30, 2023 were reflected in the skin care product category for Dr.Jart+ and the makeup product category for Smashbox and Too Faced.

Fiscal 2022 Impairment Analysis

During the fiscal 2022 third quarter, given the lower-than-expected results from international expansion to areas that continue to be impacted by COVID-19, the Company made revisions to the internal forecasts relating to its GLAMGLOW reporting unit.

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During the fiscal 2022 third quarter, given the lower-than-expected growth within key geographic regions and channels for Dr.Jart+ that continue to be impacted by the spread of COVID-19 variants and resurgence in cases and the potential future impacts relating to the uncertainty of the duration and severity of COVID-19 impacting the financial performance of the brand, the lower than expected growth in key retail channels for DECIEM, and the lower than expected results from international expansion to areas that continue to be impacted by COVID-19 for Too Faced, the Company made revisions to the internal forecasts relating to its Dr.Jart+, DECIEM and Too Faced reporting units.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company concluded that the changes in circumstances in the reporting units triggered the need for interim impairment reviews of their trademarks and goodwill.

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The most significant unobservable input used to estimate the fair value of the Dr.Jart+ trademark intangible asset was the weighted average cost of capital, which was 10.5 %.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Based on the Company’s annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2022, the Company determined that the carrying value of the Dr.Jart+ trademark exceeded its fair value.

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The most significant unobservable input used to estimate the fair value of the trademark intangible asset was the weighted average cost of capital, which was 10.5 %.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the trademark impairment charges for the three and twelve months ended June 30, 2022 and the remaining carrying values as of June 30, 2022, for each reporting unit, are as follows:

(In millions) Impairment Charge Carrying Value

(In millions) Impairment Charges Carrying Value

Reporting Unit:

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The impairment charges for the three and twelve months ended June 30, 2022 were reflected in the skin care product category.

Fiscal 2021 Impairment Testing

Fiscal 2021 Impairment Analysis

During November 2020, given the actual and the estimate of the potential future impacts relating to the uncertainty of the duration and severity of COVID-19 impacting the Company and lower than expected results from geographic expansion, the Company made further revisions to the internal forecasts relating to its GLAMGLOW reporting unit.

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The fair value of the GLAMGLOW reporting unit was based upon an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting unit.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Based on the Company’s annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2021, the Company determined that the carrying value of the GLAMGLOW and Smashbox trademarks exceeded their fair values.

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The carrying values of the customer lists and goodwill relating to the GLAMGLOW and Smashbox reporting units were zero as of November 30, 2020 and June 30, 2020, respectively.

A summary of the impairment charges for the three and twelve months ended June 30, 2021 and the remaining trademark, customer lists and goodwill carrying values as of June 30, 2021, for each reporting unit, are as follows:

Impairment Charge

(In millions) Three Months Ended June 30, 2021 Twelve Months Ended June 30, 2021 Carrying Value as of June 30, 2021

Reporting Unit:

Product Category Trademark Customer Lists Goodwill Trademark Customer Lists Goodwill Trademark Customer Lists Goodwill

GLAMGLOW Skin care $ 25 $ — $ — $ 46 $ 6 $ 54 $ 11 $ — $ —

Smashbox Makeup 11 — — 11 — — 21 — —

Total $ 36 $ — $ — $ 57 $ 6 $ 54 $ 32 $ — $ —

The impairment charges for the three and twelve months ended June 30, 2021 were reflected in the Americas region.

Fiscal 2020 Impairment Testing

During December 2019, given the continuing declines in prestige makeup, generally in North America, and the ongoing competitive activity, the Company’s Too Faced, BECCA and Smashbox reporting units made revisions to their internal forecasts concurrent with the Company’s brand strategy review process.

During March 2020, given the actual and the estimate of the potential future impacts relating to the uncertainty of the duration and severity of COVID-19 impacting the Company, the Company made additional revisions to the internal forecasts relating to its Too Faced, BECCA, Smashbox and GLAMGLOW reporting units.

The Company concluded that the changes in circumstances in these reporting units triggered the need for an interim impairment review of their respective trademarks and goodwill.

These changes in circumstances were also an indicator that the carrying amounts of their respective long-lived assets, including customer lists, may not be recoverable.

Accordingly, the Company performed interim impairment tests for the trademarks and recoverability tests for the long-lived assets as of December 31, 2019 and March 31, 2020.

The Company concluded that the carrying amounts of the long-lived assets were recoverable.

For December 31, 2019 and March 31, 2020, the Company also concluded that the carrying values of the trademarks exceeded their estimated fair values and recorded impairment charges.

For December 31, 2019, the Company utilized the relief-from-royalty method to determine discounted projected future cash flows, and for March 31, 2020, the relief-from-royalty method was based on probability weighted cash flows.

After adjusting the carrying values of the trademarks, the Company completed interim quantitative impairment tests for goodwill and recorded goodwill impairment charges for each of these reporting units.

For December 31, 2019, the fair value of each reporting unit was based upon an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting unit.

For March 31, 2020, the fair value of each reporting unit was based upon an equal weighting of the income and market approaches, utilizing estimated cash flows, based on probability weighted undiscounted cash flows, and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting unit.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Based on the Company’s annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2020, the Company determined that the carrying value of the Editions de Parfums Frédéric Malle reporting unit exceeded its fair value.

This determination was made based on updated internal forecasts, finalized and approved in June 2020, that reflected lower net sales growth projections due to a softer than expected retail environment for the brand, as well as the impacts relating to the uncertainty of the duration and severity of COVID-19.

These changes in circumstances were also an indicator that the carrying amounts of its respective long-lived assets, including customer lists, may not be recoverable.

The Company concluded that the carrying value of the trademarks exceeded its estimated fair value, which was determined utilizing the relief-from-royalty method to determine discounted projected future cash flows, and recorded impairment charges.

The Company concluded that the carrying amounts of the long-lived assets were recoverable.

After adjusting the carrying value of the trademarks, the Company completed the quantitative impairment test for goodwill and recorded a goodwill impairment charge for this reporting unit.

The fair value of this reporting unit was based upon an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting unit.

During June 2020, given the actual and the estimate of the potential future impacts relating to the uncertainty of the duration and severity of COVID-19 impacting the Company, the Company made further revisions to the internal forecasts relating to its BECCA and GLAMGLOW reporting units.

The Company concluded that the changes in circumstances in these reporting units triggered the need for an interim impairment review of their respective trademarks and goodwill.

These changes in circumstances were also an indicator that the carrying amounts of their respective long-lived assets, including customer lists, may not be recoverable.

Accordingly, the Company performed interim impairment tests for the trademarks and recoverability tests for the long-lived assets as of June 30, 2020.

The Company concluded that the carrying values of the trademarks for BECCA and GLAMGLOW exceeded their estimated fair values, which were determined utilizing the relief-from-royalty method to determine discounted projected future cash flows, and recorded impairment charges.

In addition, the Company concluded that the carrying value of the BECCA customer lists intangible asset exceeded its estimated fair value, which was determined utilizing the multi-period excess earnings income approach by discounting the incremental after-tax cash flows over multiple periods, and recorded an impairment charge.

The Company concluded that the carrying amounts of the long-lived assets of GLAMGLOW were recoverable.

After adjusting the carrying values of the trademarks and the BECCA customer lists, the Company completed interim quantitative impairment tests for goodwill and recorded goodwill impairment charges for each of these reporting units.

The fair value of each reporting unit was based upon an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting unit.

Impairment Charge

Impairment Charges

(In millions) Three Months Ended June 30, 2021 Twelve Months Ended June 30, 2021 Carrying Value as of June 30, 2021

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Product Category Trademark Customer Lists Goodwill Trademark Customer Lists Goodwill Trademark Customer Lists Goodwill

Too Faced Makeup $ — $ — $ — $ 253 $ — $ 592 $ 272 $ 217 $ 13

BECCA Makeup 24 35 15 71 35 85 27 7 13

Smashbox Makeup — — — 23 — 72 32 — —

GLAMGLOW Skin care $ 25 $ — $ — $ 46 $ 6 $ 54 $ 11 $ — $ —

Editions de Parfums Frédéric Malle Fragrance 11 — 3 11 — 3 21 2 3

Smashbox Makeup 11 — — 11 — — 21 — —

Total $ 36 $ — $ — $ 57 $ 6 $ 54 $ 32 $ — $ —

The impairment charges for the three and twelve months ended June 30, 2021 were reflected in the Americas region.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – LEASES

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Some of the Company’s lease contracts include options to extend the leases for up to 30 years, while others include options to terminate the leases within 25 years.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of total lease costs and other information for the periods relating to the Company’s finance and operating leases is as follows:

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The ROU assets and lease liabilities related to finance leases are included in Other assets and in Current debt and Long-term debt , respectively, in the accompanying consolidated balance sheets as of June 30, 2023 and 2022.

During fiscal 2021 and fiscal 2020, as a result of the continued challenging retail environment due to the COVID-19 pandemic, certain of the Company’s freestanding stores experienced lower net sales and lower expectations of future cash flows.

During fiscal 2021, as a result of the continued challenging retail environment due to the COVID-19 pandemic, certain of the Company’s freestanding stores experienced lower net sales and lower expectations of future cash flows.

These changes were an indicator that the carrying amounts may not be recoverable.

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Specifically, for the related ROU assets, the fair value was based on discounting market rent using a real estate discount rate.

As a result, the Company recognized $ 71 million and $ 215 million of long-lived asset impairments, included in Impairments of other intangible and long-lived assets, in the accompanying consolidated statements of earnings for the year ended June 30, 2021 and 2020, respectively.

As a result, the Company recognized $ 71 million of long-lived asset impairments, included in Impairments of other intangible and long-lived assets , in the accompanying consolidated statements of earnings for the year ended June 30, 2021.

The fiscal 2021 impairments related to other assets (i.e.

rights associated with commercial operating leases) of $ 27 million, operating lease right-of-use assets of $ 25 million and the related property, plant and equipment in certain freestanding stores of $ 19 million.

The fiscal 2020 impairments related to operating lease ROU assets of $ 131 million, as well as the related property, plant and equipment and other long-lived assets in certain freestanding stores of $ 84 million, combined.

THE ESTÉE LAUDER COMPANIES INC.

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A summary of impairment charges is as follows:

Year Ended June 30

(In millions) 2021 2020

Product Category Impairment Charge Impairment Charge

(In millions) Year Ended June 30, 2021

Product Category Impairment Charge

Skin care $ 1

Makeup 52 160

Fragrance 14 18

Hair care 4 14

Total $ 71 $ 215

The Americas $ 23

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Asia/Pacific —

Total $ 71 $ 215

NOTE 8 – CHARGES ASSOCIATED WITH RESTRUCTURING AND OTHER ACTIVITIES

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company previously estimated a net reduction over the duration of the PCBA Program in the range of approximately 2,000 to 2,500 positions globally, including temporary and part-time employees.

The Company has revised these estimates based on the review of the PCBA Program.

As of June 30, 2023, the Company estimated a net reduction over the duration of the PCBA Program in the range of 2,800 to 3,200 positions globally, including temporary and part-time employees.

This reduction takes into account the elimination of some positions, retraining and redeployment of certain employees and investment in new positions in key areas.

The Company also estimated the closure over the duration of the PCBA Program of approximately 10 % to 15 % of its freestanding stores globally, primarily in Europe, the Middle East & Africa and in North America.

The Company approved specific initiatives under the PCBA Program through fiscal 2022 and expects to substantially complete those initiatives through fiscal 2023.

The Company previously estimated that the PCBA Program would result in related restructuring and other charges totaling between $ 400 million and $ 500 million, before taxes.

After concluding the final approvals and reviewing the progress of previously approved initiatives under the PCBA Program that are being implemented, the Company has revised its estimates for cost approvals under the PCBA Program.

Inclusive of approvals from inception through June 28, 2022, the Company now estimates that the PCBA Program may result in related restructuring and other charges totaling between $ 500 million and $ 515 million, before taxes.

PCBA Program Approvals

The PCBA Program cumulative charges (adjustments) approved by the Company through June 30, 2022 were:

Net Sales) Cost of Sales Operating Expenses Total

(In millions) Restructuring

Charges Other

Total Charges (Adjustments) Approved

Fiscal 2021 $ 42 $ ( 6 ) $ 257 $ 21 $ 314

Fiscal 2022 1 15 167 18 201

Cumulative through June 30, 2022 $ 43 $ 9 $ 424 $ 39 $ 515

Included in the above table, cumulative PCBA Program restructuring initiatives approved by the Company through June 30, 2022 by major cost type were:

(In millions) Employee-

Costs Contract

Terminations Other Exit

Restructuring Charges Approved

Fiscal 2021 $ 132 $ 108 $ 13 $ 4 $ 257

Fiscal 2022 83 53 30 1 167

Cumulative through June 30, 2022 $ 215 $ 161 $ 43 $ 5 $ 424

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company also estimated the closure over the duration of the PCBA Program of approximately 14 % to 17 % of its freestanding stores globally, primarily in North America and Europe, the Middle East & Africa.

The Company approved specific initiatives under the PCBA Program through fiscal 2022 and has substantially completed those initiatives through fiscal 2023.

Inclusive of approvals from inception through June 30, 2022, the Company estimates, as of June 30, 2023, that the PCBA Program will result in related restructuring and other charges totaling between $ 450 million and $ 480 million, before taxes.

Specific actions taken since the PCBA Program inception include:

• Optimize Digital Organization and Other Go-To-Market Organizations – The Company approved initiatives to enhance its go-to-market capabilities and shift more resources to support online growth.

These actions will result in a net reduction of the workforce, which includes position eliminations, the re-leveling of certain positions and an investment in new capabilities.

These actions are substantially complete and have resulted in a net reduction of the workforce, which includes position eliminations, the re-leveling of certain positions and an investment in new capabilities.

• Optimize Select Marketing, Brand and Global Functions – The Company has started to reduce its corporate and certain of its brand office footprints and is moving toward the future of work in a post-COVID-19 environment, by restructuring where and how its employees work and collaborate.

In addition, the Company has approved initiatives to reduce organizational complexity and leverage scale across various Global functions.

These actions will result in asset write-offs, employee severance, lease termination fees, and consulting and other professional services for the design and implementation of the future structures and processes.

These actions are substantially complete and resulted in asset write-offs, employee severance, lease termination fees, and consulting and other professional services for the design and implementation of the future structures and processes.

• Optimize Distribution Network – To help restore profitability to pre-COVID-19 pandemic levels in certain areas of its distribution network and, as part of a broader initiative to be completed in phases, the Company has approved initiatives to close a number of underperforming freestanding stores, counters and other retail locations, mainly in certain affiliates across all geographic regions, including the Company's travel retail network.

These anticipated closures reflect changing consumer behaviors including higher demand for online and omnichannel capabilities.

These activities will result in a net reduction in workforce, inventory and other asset write-offs, termination of contracts, and product returns.

These closures reflect changing consumer behaviors including higher demand for online and omnichannel capabilities.

These activities are substantially complete and resulted in product returns, termination of contracts, a net reduction in workforce, and inventory and other asset write-offs.

• Exit of the Global Distribution of BECCA Products – In reviewing the Company's brand portfolio to improve efficiency and the sustainability of long-term investments, the decision was made to exit the global distribution of BECCA products due to its limited distribution, the ongoing decline in product demand and the challenging environment caused by the COVID-19 pandemic.

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• Exit of Certain Designer Fragrance Licenses – In reviewing the Company’s brand portfolio of fragrances and to focus on investing its resources on alternative opportunities for long-term growth and value creation globally, the Company announced that it would not be renewing its existing license agreements for the Donna Karan New York, DKNY, Michael Kors, Tommy Hilfiger and Ermenegildo Zegna product lines when their respective terms expire in June 2023.

The Company has since negotiated early termination agreements with each of the licensors effective June 30, 2022 and continued to sell products under these licenses until such time.

These actions resulted in employee-related costs, asset write-offs, including charges for the impairment of goodwill, and consulting and legal fees.

The Company negotiated early termination agreements with each of the licensors effective June 30, 2022 and continued to sell products under these licenses until such time.

These actions resulted in asset write-offs, including charges for the impairment of goodwill, employee-related costs, and consulting and legal fees.

• Brand Transformation – In reviewing the Company’s brand portfolio to accelerate growth within the makeup product category and to support long-term investments, the decision was made to strategically reposition Smashbox to capitalize on changing consumer preferences and to mitigate the impact caused by the COVID-19 pandemic on the brand.

These actions will result primarily in product returns and inventory write-offs.

These actions are substantially complete and have primarily resulted in product returns and inventory write-offs.

PCBA Program Restructuring and Other Charges

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Employee-Related Costs – Employee-related costs are primarily comprised of severance and other post-employment benefit costs, calculated based on salary levels, prior service and other statutory minimum benefits, if applicable.

Asset-Related Costs – Asset-related costs primarily consist of asset write-offs or accelerated depreciation related to long-lived assets in certain freestanding stores (including rights associated with commercial operating leases and operating lease right-of-use assets) that will be taken out of service prior to their existing useful life as a direct result of a restructuring initiative.

These costs also include goodwill and other intangible asset impairment charges relating to the exit of the global distribution of BECCA products.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

These costs also include goodwill and other intangible asset impairment charges relating to the exit of the global distribution of BECCA products.

Contract Terminations – Costs related to contract terminations include continuing payments to a third party after the Company has ceased benefiting from the rights conveyed in the contract, or a payment made to terminate a contract prior to its expiration.

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Fiscal 2022 4 5 109 9 127

Fiscal 2023 27 3 35 12 77

Cumulative through June 30, 2023 $ 45 $ 10 $ 345 $ 25 $ 425

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions) Employee-

Terminations Other Exit

Restructuring Charges

Restructuring Charges (Adjustments)

Fiscal 2021 $ 119 $ 75 $ 6 $ 1 $ 201

Fiscal 2022 84 11 13 1 109

Fiscal 2023 3 31 ( 2 ) 3 35

Cumulative through June 30, 2023 $ 206 $ 117 $ 17 $ 5 $ 345

(1) Asset-related costs include fiscal 2021 goodwill and other intangible asset impairment charges of $ 13 million and $ 34 million, respectively, relating to the exit of the global distribution of BECCA products.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in accrued restructuring charges for the fiscal year ended June 30, 2023 relating to the PCBA Program were:

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Balance at June 30, 2022 125 — — — 125

Charges 3 31 ( 2 ) 3 $ 35

Cash payments ( 40 ) — ( 1 ) ( 3 ) $ ( 44 )

Non-cash asset write-offs — ( 31 ) — — $ ( 31 )

Translation and other adjustments ( 7 ) — 4 — $ ( 3 )

Balance at June 30, 2023 $ 81 $ — $ 1 $ — $ 82

Accrued restructuring charges at June 30, 2023 relating to the PCBA Program are expected to result in cash expenditures funded from cash provided by operations of approximately $ 61 million, $ 19 million, and $ 2 million for each of fiscal 2024, 2025 and 2026, respectively.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 – INCOME TAXES

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A portion of these earnings is taxed in the United States.

On August 16, 2022, the U.S.

federal government enacted the Inflation Reduction Act, with tax provisions primarily focused on implementing a 1% excise tax on share repurchases and a 15% corporate alternative minimum tax based on global adjusted financial statement income.

The excise tax was effective beginning with the Company’s third quarter of fiscal 2023 and did not have an impact on the Company’s results of operations or financial position.

The corporate alternative minimum tax will be effective beginning with the Company's first quarter of fiscal 2024.

The Company continues to monitor developments and evaluate projected impacts, if any, of this provision to its consolidated financial statements.

On July 20, 2020, the U.S.

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(1) Included in Other income, net in the accompanying consolidated statements of earnings for the fiscal year ended June 30, 2021.

(2) For fiscal 2021 and 2020, the reconciling items between the Company's U.S.

federal statutory income tax rate and the Company's actual effective tax rate were materially impacted by the increase from fiscal 2020 to fiscal 2021 in earnings before income taxes.

(2) For fiscal 2023, the reconciling items between the Company's U.S.

federal statutory income tax rate and the Company's actual effective tax rate were materially impacted by the decrease in earnings before income taxes from fiscal 2022 to fiscal 2023.

Income tax reserve adjustments represent changes in the Company’s net liability for unrecognized tax benefits related to prior-year tax positions including the impact of tax settlements and lapses of the applicable statutes of limitations.

All excess tax benefits and tax deficiencies related to share-based compensation awards are recorded as income tax expense or benefit in the consolidated statements of earnings.

The Company recognized $ 82 million, $ 99 million and $ 78 million of excess tax benefits, net as a reduction to the provision for income taxes in the accompanying consolidated statements of earnings for the twelve months ended June 30, 2022, 2021 and 2020, respectively.

The Company has $ 8,089 million of undistributed earnings of foreign subsidiaries at June 30, 2022.

Included in this amount is $ 5,736 million of earnings considered permanently reinvested.

There may be foreign tax ramifications associated with the distribution of such permanently reinvested earnings, which the Company is currently evaluating.

Since the application of the relevant foreign tax laws to such distribution is largely uncertain at this time, it is not practicable to determine the amount of associated tax.

Any state income taxes associated with the distribution of such earnings is not expected to be material.

The Company recognized $ 11 million, $ 82 million and $ 99 million of excess tax benefits, net as a reduction to the provision for income taxes in the accompanying consolidated statements of earnings for the fiscal year ended June 30, 2023, 2022 and 2021, respectively.

The Company has $ 8,876 million of undistributed earnings of foreign subsidiaries as of June 30, 2023.

Included in this amount is $ 897 million of earnings considered permanently reinvested and for which no deferred income taxes have been provided.

If these reinvested earnings were repatriated into the United States as dividends, the Company would be subject to approximately $ 55 million in taxes, primarily related to foreign withholding taxes as well as additional state and local income taxes.

The Company historically had not provided for deferred income taxes on the undistributed earnings of certain foreign subsidiaries as they were considered indefinitely reinvested outside the United States.

During the fourth quarter of fiscal 2023, in connection with a planned change in the Company's legal entity structure that exempts foreign withholding tax on certain undistributed earnings, the Company changed its assertion regarding its ability and intent to indefinitely reinvest undistributed earnings of certain foreign subsidiaries and determined that $ 5,548 million of undistributed earnings of such foreign subsidiaries are no longer considered indefinitely reinvested.

The federal, state, local and foreign deferred income tax impact of this change is not material.

THE ESTÉE LAUDER COMPANIES INC.

10 unchanged sentences

Lease liabilities 479 504

Research-related expenses 200 121

Other differences between tax and financial statement values 107 26

7 unchanged sentences

Total deferred tax liabilities ( 1,132 ) ( 1,241 )

Total net deferred tax assets (liabilities) $ 3 $ ( 218 )

Total net deferred tax assets $ 240 $ 3

As of June 30, 2023, the Company had net deferred tax assets of $ 240 million, of which $ 860 million is included in Other assets and $ 620 million is included in Other noncurrent liabilities in the accompanying consolidated balance sheets.

As of June 30, 2021, the Company had net deferred tax liabilities of $ 218 million, of which $ 631 million is included in Other assets and $ 849 million is included in Other noncurrent liabilities in the accompanying consolidated balance sheets.

As of June 30, 2022, the Company had net deferred tax assets of $ 3 million, of which $ 695 million is included in Other assets and $ 692 million is included in Other noncurrent liabilities in the accompanying consolidated balance sheets.

As of June 30, 2023 and 2022, certain subsidiaries had $ 528 million and $ 523 million of foreign net operating loss carryforwards, respectively, the tax effect of which was $ 143 million and $ 136 million, respectively, as well as U.S.

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The objective of CAP is to reduce taxpayer burden and uncertainty while assuring the IRS of the accuracy of income tax returns prior to filing, thereby reducing or eliminating the need for post-filing examinations.

Subsequent to June 30, 2022, the IRS completed its examination procedures with respect to fiscal 2021 under the IRS CAP.

During the fourth quarter of fiscal 2023, the IRS completed its examination procedures with respect to fiscal 2022 under the IRS CAP.

There was no impact to the Company’s consolidated financial statements.

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(In millions) 2023 2022

Advertising, merchandising and sampling $ 250 $ 294

Employee compensation $ 546 $ 693

Accrued sales incentives 321 278

Deferred revenue 323 312

Payroll and other non-income taxes 345 359

Sales return accrual 252 369

Other 2,026 2,077

8 unchanged sentences

(In millions) 2023 2022 Committed Uncommitted

3.125 % Senior Notes, due December 1, 2049 (“2049 Senior Notes”)

5.150 % Senior Notes, due May 15, 2053 ("2053 Senior Notes")

$ 590 $ — $ — $ —

3.125 % Senior Notes, due December 1, 2049 (“2049 Senior Notes”)

4.150 % Senior Notes, due March 15, 2047 (“2047 Senior Notes”)

2 unchanged sentences

6.000 % Senior Notes, due May 15, 2037 (“2037 Senior Notes”)

5.75 % Senior Notes, due October 15, 2033 (“2033 Senior Notes”)

5.75 % Senior Notes, due October 15, 2033 (“October 2033 Senior Notes”)

4.650 % Senior Notes, due May 15, 2033 ("May 2033 Senior Notes")

1.950 % Senior Notes, due March 15, 2031 (“2031 Senior Notes”)

1 unchanged sentence

2.375 % Senior Notes, due December 1, 2029 (“2029 Senior Notes”)

4.375 % Senior Notes, due May 15, 2028 ("2028 Senior Notes")

3.150 % Senior Notes, due March 15, 2027 (“2027 Senior Notes”)

2 unchanged sentences

Commercial paper (1)

988 — — 1,500

Other long-term borrowings 33 10 — —

4 unchanged sentences

$ 7,117 $ 5,144

(1) Consists of $ 1,000 million principal and unamortized debt discount of $ 12 million.

THE ESTÉE LAUDER COMPANIES INC.

1 unchanged sentence

As of June 30, 2023, the Company’s long-term debt consisted of the following:

Notes Issue Date Price Yield Principal Unamortized

Issue Date Price Yield Principal Unamortized

Debt (Discount)

3 unchanged sentences

($ in millions)

2049 Senior Notes (9)

November 2019 98.769 % 3.189 % $ 650 $ ( 8 ) $ — $ ( 6 ) June 1/December 1

2053 Senior Notes May 2023 99.455 % 5.186 % $ 600 $ ( 3 ) $ — $ ( 7 ) May 15/November 15

2049 Senior Notes November 2019 98.769 3.189 650 ( 8 ) — ( 6 ) June 1/December 1

2047 Senior Notes (1)

4 unchanged sentences

May 2016 110.847 3.753 150 14 — ( 2 ) June 15/December 15

2042 Senior Notes (9)

August 2012 99.567 3.724 250 ( 1 ) — ( 2 ) February 15/August 15

2042 Senior Notes August 2012 99.567 3.724 250 ( 1 ) — ( 2 ) February 15/August 15

2037 Senior Notes (3)

May 2007 98.722 6.093 300 ( 2 ) — ( 3 ) May 15/November 15

2033 Senior Notes (4),(9)

October 2033 Senior Notes (4)

September 2003 98.645 5.846 200 ( 1 ) — ( 1 ) April 15/October 15

May 2033 Senior Notes (9)

May 2023 99.897 4.663 700 ( 1 ) — ( 4 ) May 15/November 15

2031 Senior Notes (5),(7)

4 unchanged sentences

November 2019 99.046 2.483 650 ( 4 ) — ( 3 ) June 1/December 1

2028 Senior Notes May 2023 99.897 4.398 700 ( 1 ) — ( 3 ) May 15/November 15

2027 Senior Notes (6)

February 2017 99.963 3.154 500 — — ( 1 ) March 15/September 15

2024 Senior Notes (9)

November 2019 99.421 2.122 500 ( 1 ) — ( 1 ) June 1/December 1

2022 Senior Notes (7),(9)

August 2012 99.911 2.360 250 — — — February 15/August 15

2024 Senior Notes November 2019 99.421 2.122 500 ( 1 ) — ( 1 ) June 1/December 1

(1) In November 2016, in anticipation of the issuance of the 2047 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $ 350 million at a weighted-average all-in rate of 3.01 %.

17 unchanged sentences

As a result of the treasury lock agreements, the debt discount and debt issuance costs, the effective interest rate on the 2027 Senior Notes will be 3.18 % over the life of the debt.

(7) The Company entered into interest rate swap agreements with a notional amount totaling $ 250 million, $ 700 million and $ 300 million to effectively convert the fixed rate interest on its outstanding 2022 Senior Notes, 2030 Senior Notes and 2031 Senior Notes to variable interest rates based on three months LIBOR plus a margin.

(7) The Company entered into interest rate swap agreements with a notional amount totaling $ 700 million and $ 300 million to effectively convert the fixed rate interest on its outstanding 2030 Senior Notes and 2031 Senior Notes to variable interest rates based on three months LIBOR plus a margin.

(8) In April and May 2019, in anticipation of the issuance of the 2029 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $ 500 million at a weighted-average all-in rate of 2.50 %.

1 unchanged sentence

As a result of the treasury lock agreements, as well as the debt discount and debt issuance costs, the effective interest rate on the 2029 Senior Notes will be 3.15 % over the life of the debt.

(9) The Senior Notes contain certain customary covenants, including limitations on indebtedness secured by liens.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(9) In December 2022 and March 2023, in anticipation of the issuance of the May 2033 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $ 575 million at a weighted-average all-in rate of 3.57 %.

The treasury lock agreements were settled upon the issuance of the new debt, and the Company recognized a loss in OCI of $ 5 million that is being amortized to interest expense over the life of the May 2033 Senior Notes.

As a result of the treasury lock agreements, as well as the debt discount and debt issuance costs, the effective interest rate on the May 2033 Senior Notes will be 4.83 % over the life of the debt.

(10) The Senior Notes contain certain customary covenants, including limitations on indebtedness secured by liens.

In January 2023, the Company entered into a $ 2,000 million senior unsecured revolving credit facility (the “364-Day Facility”) to support the Company's commercial paper program and for general corporate purposes, including to finance the Company's fiscal 2023 fourth quarter TOM FORD Acquisition.

In January 2023, in connection with the 364-Day Facility, the Company increased its commercial paper program under which it may issue commercial paper in the United States from $ 2,500 million to $ 4,500 million.

In May 2023, the Company completed a public offering of $ 2,000 million, consisting of $ 700 million aggregate principal amount of its 2028 Senior Notes, $ 700 million aggregate principal amount of its May 2033 Senior Notes and $ 600 million aggregate principal amount of its 2053 Senior Notes.

The Company used proceeds from this offering for general corporate purposes, including to repay outstanding commercial paper as it matured.

In June 2023, the Company decreased the size of its commercial paper program to $ 2,500 million and terminated the undrawn $ 2,000 million 364-Day Facility.

As of June 30, 2023 and August 11, 2023, the Company had $ 1,000 million and $ 785 million, respectively, outstanding under its commercial paper program, which may be refinanced on a periodic basis as it matures at the then-prevailing market interest rates.

Proceeds from issuance of commercial paper with maturities greater than 90 days were $ 765 million during fiscal 2023.

On August 14, 2023, the Company issued an additional $ 215 million of commercial paper under its commercial paper program.

On August 15, 2022, the Company repaid the outstanding principal balance of its $ 250 million 2.35 % Senior Notes with cash from operations.

In October 2021, the Company replaced its $ 1,500 million senior unsecured revolving credit facility that was set to expire in October 2023 with a new $ 2,500 million senior unsecured revolving credit facility (the “New Facility”).

7 unchanged sentences

At June 30, 2023, no borrowings were outstanding under the New Facility.

In March 2021, the Company completed a public offering of $ 600 million aggregate principal amount of its 2031 Senior Notes.

The Company used some of the net proceeds from this offering for general corporate purposes, including to fund the acquisition of DECIEM, operating expenses, working capital and capital expenditures.

In April 2021, the Company repaid $ 450 million aggregate principal amount of its 1.700 % Senior Notes due May 10, 2021 in full, partially from the net proceeds of the 2031 Senior Notes issued and cash on hand, and the corresponding interest rate swaps were settled.

The Company has a $ 2,500 million commercial paper program under which it may issue commercial paper in the United States.

As of June 30, 2022, no amounts were outstanding.

The Company maintains uncommitted credit facilities in various regions throughout the world.

2 unchanged sentences

Refer to Note 16 – Commitments and Contingencies for the Company’s projected debt service payments, as of June 30, 2023, over the next five fiscal years.

On August 15, 2022, the Company repaid the outstanding principal balance of its $ 250 million 2.35 % Senior Notes with cash from operations.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – DERIVATIVE FINANCIAL INSTRUMENTS

1 unchanged sentence

The Company enters into foreign currency forward contracts, and may enter into option contracts, to reduce the effects of fluctuating foreign currency exchange rates.

The Company also uses cross-currency swap contracts to hedge the impact of foreign currency changes on certain intercompany foreign currency denominated debt.

In addition, the Company enters into interest rate derivatives to manage the effects of interest rate movements on the Company’s aggregate liability portfolio, including potential future debt issuances.

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Costs associated with entering into derivative financial instruments have not been material to the Company’s consolidated financial results.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For each derivative contract entered into, where the Company looks to obtain hedge accounting treatment, the Company formally and contemporaneously documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking the hedge transaction, the nature of the risk being hedged, and how the hedging instruments’ effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively.

2 unchanged sentences

If based on the qualitative assessment, it is determined that a derivative has ceased to be a highly effective hedge, the Company will perform a quantitative assessment to determine whether to discontinue hedge accounting with respect to that derivative prospectively.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair values of the Company’s derivative financial instruments included in the consolidated balance sheets are presented as follows:

8 unchanged sentences

Foreign currency cash flow hedges Prepaid expenses and other current assets $ 56 $ 57 Other accrued liabilities $ 16 $ 1

Cross-currency swap contracts Prepaid expenses and other current assets 22 — Other accrued liabilities — —

Net investment hedges Prepaid expenses and other current assets — 107 Other accrued liabilities 13 —

5 unchanged sentences

(1) See Note 13 – Fair Value Measurements for further information about how the fair value of derivative assets and liabilities are determined.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amounts of the gains and losses related to the Company’s derivative financial instruments designated as hedging instruments that are included in the assessment of effectiveness are as follows:

8 unchanged sentences

Interest rate-related derivatives 2 24 Interest expense ( 1 ) ( 1 )

93 ( 45 ) 2 ( 24 )

Derivatives in Net Investment Hedging Relationships (2) :

5 unchanged sentences

(3) Included within translation adjustments as a component of AOCI on the Company’s consolidated balance sheets.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amount of Gain (Loss) Recognized in Earnings on Derivatives

3 unchanged sentences

Relationships:

Interest rate swap contracts Interest expense $ ( 130 ) $ —

Cross-currency swap contracts (1)

Selling, general and administrative $ 42 $ —

Interest rate swap contracts (2)

Interest expense $ ( 36 ) $ ( 130 )

(1) Changes in the fair value representing hedge components included in the assessment of effectiveness of the cross-currency swap contracts are exactly offset by the change in the fair value of the underlying intercompany foreign currency denominated debt.

The gain recognized in earnings from cross-currency swap contracts related to the amount excluded from effectiveness testing was $ 9 million.

(2) Changes in the fair value of the interest rate swap agreements are exactly offset by the change in the fair value of the underlying long-term debt.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Additional information regarding the cumulative amount of fair value hedging loss recognized in earnings for items designated and qualifying as hedged items in fair value hedges is as follows:

Additional information regarding the cumulative amount of fair value hedging gain (loss) recognized in earnings for items designated and qualifying as hedged items in fair value hedges is as follows:

(In millions)

Line Item in the Consolidated Balance Sheets in

Which the Hedged Item is Included Carrying Amount of the

Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included Carrying Amount of the

Hedged Liabilities Cumulative Amount of Fair

Value Hedging Gain (Loss)

Included in the Carrying Amount of the Hedged

Included in the Carrying Amount of the Hedged Liability

June 30, 2023 June 30, 2023

Current debt $ 250 $ —

Long-term debt $ 843 $ ( 150 )

Total debt $ 1,128 $ ( 115 )

Intercompany debt $ — $ 42

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Additional information regarding the effects of fair value and cash flow hedging relationships for derivatives designated and qualifying as hedging instruments is as follows:

(In millions) Net Sales Interest Expense Net Sales Interest Expense

(In millions) Net Sales Selling, General and Administrative Interest Expense Net Sales Selling, General and Administrative Interest Expense

Total amounts of income and expense line items presented in the consolidated statements of earnings in which the effects of fair value and cash flow hedges are recorded $ 15,910 $ 9,575 $ 255 $ 17,737 $ 9,888 $ 167

1 unchanged sentence

Gain (loss) on fair value hedge relationships – interest rate contracts:

Hedged item Not applicable 130 Not applicable —

Derivatives designated as hedging instruments Not applicable ( 130 ) Not applicable —

Gain (loss) on cash flow hedge relationships – interest rate contracts:

Amount of loss reclassified from AOCI into earnings Not applicable ( 1 ) Not applicable ( 2 )

Gain (loss) on cash flow hedge relationships – foreign currency forward contracts:

Amount of gain (loss) reclassified from AOCI into earnings 3 Not applicable ( 22 ) Not applicable

Hedged item N/A N/A 36 N/A N/A 130

Derivatives designated as hedging instruments N/A N/A ( 36 ) N/A N/A ( 130 )

Gain (loss) on fair value hedge relationships – cross-currency swap contracts:

Hedged item N/A ( 42 ) N/A N/A — N/A

Derivatives designated as hedging instruments N/A 42 N/A N/A — N/A

Loss on cash flow hedge relationships – interest rate contracts:

Amount of loss reclassified from AOCI into earnings N/A N/A ( 1 ) N/A N/A ( 1 )

Gain on cash flow hedge relationships – foreign currency forward contracts:

Amount of gain reclassified from AOCI into earnings 71 N/A N/A 3 N/A N/A

N/A (Not applicable)

The amount of the gains and losses related to the Company’s derivative financial instruments not designated as hedging instruments are presented as follows:

7 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company's derivative instruments are subject to enforceable master netting agreements.

These agreements permit the net settlement of these contracts on a per-institution basis;

however, the Company records the fair value on a gross basis in its consolidated balance sheets based on maturity dates, including those subject to master netting arrangements.

The following table provides information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of netting arrangements with each of the counterparties:

As of June 30, 2023 As of June 30, 2022

(In millions) Gross Amounts of Assets / (Liabilities) Presented in Balance Sheet Contracts Subject to Netting Net Amounts of Assets / (Liabilities) Gross Amounts of Assets / (Liabilities) Presented in Balance Sheet Contracts Subject to Netting Net Amounts of Assets / (Liabilities)

Derivative Financial Contracts

Derivative assets $ 98 $ ( 53 ) $ 45 $ 215 $ ( 104 ) $ 111

Derivative liabilities ( 199 ) 53 ( 146 ) ( 220 ) 104 ( 116 )

Total $ ( 101 ) $ — $ ( 101 ) $ ( 5 ) $ — $ ( 5 )

Cash Flow Hedges

6 unchanged sentences

The purpose of the hedging activities is to minimize the effect of interest rate movements on the cost of debt issuance.

For hedge contracts that are no longer deemed highly effective, hedge accounting is discontinued and gains and losses in AOCI are reclassified to sales when the underlying forecasted transaction occurs.

If it is probable that the forecasted transaction will no longer occur, then any gains or losses in AOCI are reclassified to current-period sales.

For foreign currency hedge contracts that are no longer deemed highly effective, hedge accounting is discontinued and gains and losses in AOCI are reclassified to Net sales when the underlying forecasted transaction occurs.

If it is probable that the forecasted transaction will no longer occur, then any gains or losses in AOCI are reclassified to current-period Net sales.

As of June 30, 2023, the Company’s foreign currency cash flow hedges were highly effective.

The estimated net gain on the Company’s derivative instruments designated as cash flow hedges as of June 30, 2023 that is expected to be reclassified from AOCI into earnings, net of tax, within the next twelve months is $ 25 million.

The accumulated net gain (loss) on derivative instruments in AOCI was $ 90 million and $( 1 ) million as of June 30, 2022 and 2021, respectively.

The accumulated net gain on derivative instruments designated as cash flow hedges in AOCI was $ 79 million and $ 90 million as of June 30, 2023 and 2022, respectively.

Fair Value Hedges

The Company enters into interest rate derivative contracts to manage the exposure to interest rate fluctuations on its funded indebtedness.

The Company has interest rate swap agreements, with notional amounts totaling $ 250 million, $ 700 million and $ 300 million to effectively convert the fixed rate interest on its 2022 Senior Notes, 2030 Senior Notes and 2031 Senior Notes, respectively, to variable interest rates based on three-month LIBOR plus a margin.

At June 30, 2023, the Company has interest rate swap agreements, with notional amounts totaling $ 700 million and $ 300 million to effectively convert the fixed rate interest on its 2030 Senior Notes and 2031 Senior Notes, respectively, to variable interest rates based on three-month LIBOR plus a margin.

These interest rate swap agreements are designated as fair value hedges of the related long-term debt, and the changes in the fair value of the interest rate swap agreements are exactly offset by the change in the fair value of the underlying long-term debt.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company enters into cross-currency swap contracts to manage the exposure of foreign exchange rate fluctuations on its intercompany foreign currency denominated debt.

At June 30, 2023, the Company has cross-currency swap contracts with notional amounts totaling $ 491 million, to hedge the impact of foreign currency changes on certain intercompany foreign currency denominated debt.

The cross-currency swap contracts are designated as fair value hedges of the related intercompany debt, and the gains and losses representing hedge components included in the assessment of effectiveness are presented in the same income statement line item as the earnings effect of the hedged transaction.

Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis.

The earnings recognition of excluded components is presented in the same income statement line item as the earnings effect of the hedged transaction.

Any difference between the changes in the fair value of the excluded components and amounts recognized in earnings will be recognized in AOCI.

The estimated net gain on the Company’s derivative instruments designated as fair value hedges as of June 30, 2023 that is expected to be reclassified from AOCI into earnings, net of tax, within the next twelve months is $ 14 million.

The accumulated net loss on derivative instruments designated as fair value hedges in AOCI was $ 20 million as of June 30, 2023.

Net Investment Hedges

2 unchanged sentences

The purpose of the hedging activities is to minimize the effect of foreign exchange rate movements on the Company’s net investment in these foreign operations.

The net investment hedge contracts have varying maturities through the end of July 2022.

The net investment hedge contracts have varying maturities through the end of November 2023.

Hedge effectiveness of the net investment hedge contracts is based on the spot method.

22 unchanged sentences

Foreign currency forward contracts — 76 — 76

Interest rate-related derivatives — 24 — 24

Cross-currency swap contracts — 22 — 22

Total $ 3,241 $ 98 $ — $ 3,339

12 unchanged sentences

Foreign currency forward contracts $ — $ 105 $ — $ 105

Interest rate-related derivatives — 115 — 115

DECIEM stock options — — 74 74

7 unchanged sentences

DECIEM stock options 99 99 74 74

Foreign currency forward contracts – asset (liability), net 86 86 ( 4 ) ( 4 )

Interest rate-related derivatives – asset (liability), net ( 91 ) ( 91 ) 15 15

Deferred consideration payable 341 338 38 38

Cross-currency swap contracts - asset, net 22 22 — —

Foreign currency forward contracts – asset, net 27 27 86 86

Interest rate-related derivatives – liability, net ( 150 ) ( 150 ) ( 91 ) ( 91 )

The following table presents the Company’s impairment charges for certain of its nonfinancial assets measured at fair value on a nonrecurring basis, classified as Level 3, during fiscal 2023, 2022 and 2021:

(In millions) Impairment charges Date of Fair Value Measurement Fair Value (1)

Other intangible assets, net (trademarks)

Dr.Jart+ $ 100 November 30, 2022 $ 325

Too Faced 86 November 30, 2022 186

Smashbox 21 December 31, 2022 —

Total $ 207 $ 511

(1) See Note 6 – Goodwill and Other Intangible Assets for discussion of the valuation techniques used to measure fair value, the description of the inputs and information used to develop those inputs.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions) Impairment charges Date of Fair Value Measurement Fair Value (1)

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(2) See Note 8 – Charges Associated with Restructuring and Other Activities for further information relating to goodwill and other intangible asset impairment charges recorded in connection with the exit of the global distribution of BECCA products.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions) Impairment

Charges Date of Fair Value

Measurement Fair Value (1)

Too Faced $ 592 March 31, 2020 $ 13

Smashbox 72 March 31, 2020 —

Editions de Parfums Frédéric Malle 3 April 1, 2020 3

BECCA 85 June 30, 2020 13

GLAMGLOW 60 June 30, 2020 54

Other intangible assets, net (trademark)

Too Faced 253 March 31, 2020 272

Smashbox 23 March 31, 2020 32

Editions de Parfums Frédéric Malle 11 April 1, 2020 21

BECCA 71 June 30, 2020 27

GLAMGLOW 6 June 30, 2020 57

Total 364 409

Other intangible assets, net (customer lists)

BECCA 35 June 30, 2020 7

Long-lived assets 215 June 30, 2020 200

Total $ 1,426 $ 699

(1) See Note 6 – Goodwill and Other Intangible Assets and Note 7 – Leases for discussion of the valuation techniques used to measure fair value, the description of the inputs and information used to develop those inputs.

The following methods and assumptions were used to estimate the fair value of the Company’s financial instruments for which it is practicable to estimate that value:

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To determine the fair value of contracts under the model, the difference between the contract price and the current forward rate was discounted using LIBOR for contracts with maturities up to 12 months, and swap yield curves for contracts with maturities greater than 12 months.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cross-currency swap contracts - The fair value of the Company’s cross-currency swap contracts were determined using an industry-standard valuation model, which is based on the income approach.

The significant observable inputs to the model, such as yield curves and currency spot and forward rates, were obtained from independent pricing services.

Interest rate-related derivatives – The fair values of the Company’s interest rate contracts were determined using an industry-standard valuation model, which is based on the income approach.

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The Company’s debt is classified within Level 2 of the valuation hierarchy.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred consideration payable – The deferred consideration payable as of June 30, 2023 consists primarily of deferred payments associated with the TOM FORD Acquisition.

The fair value of the payments treated as deferred consideration payable are calculated based on the net present value of cash payments using an estimated borrowing rate based on quoted prices for a similar liability.

The Company’s deferred consideration payable is classified within Level 2 of the valuation hierarchy.

Refer to Note 5 – Business and Asset Acquisitions for additional information associated with the TOM FORD Acquisition.

DECIEM stock options – The stock option liability represents the employee stock options issued by DECIEM in replacement and exchange for certain vested and unvested DECIEM employee stock options previously issued by DECIEM, in connection with the Company's acquisition of DECIEM.

The DECIEM stock options are subject to the terms and conditions of DECIEM's 2021 Stock Option Plan.

The initial fair value of the DECIEM stock option liability was calculated using the acquisition date fair value multiplied by the number of options replaced (consisting of vested and partially vested stock options) on the day following the acquisition date.

The acquisition date fair value was calculated using the Monte Carlo Method, which requires certain assumptions.

The DECIEM stock option liability is measured using the Monte Carlo Method, which requires certain assumptions.

Significant changes in the projected future operating results would result in a higher or lower fair value measurement.

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These inputs are categorized as Level 3 of the valuation hierarchy.

The DECIEM stock options are remeasured to fair value at each reporting date through the period when the options are exercised or repurchased (i.e.

when they are settled), with an offsetting entry to compensation expense.

See Note 5 – Acquisition of Businesses and Note 18 – Stock Programs for discussion .

The DECIEM stock options are remeasured to fair value at each reporting date through the period when the options are exercised or repurchased (i.e., when they are settled), with an offsetting entry to compensation expense.

See Note 5 – Business and Asset Acquisitions and Note 18 – Stock Programs for discussion .

Changes in the DECIEM stock option liability for the year ended June 30, 2023 are included in Selling, general and administrative expenses in the accompanying consolidated statements of earnings and were as follows:

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DECIEM stock option liability as of June 30, 2023 $ 99

(1) Amount inc ludes expense attributable to graded vesting of stock options which is not material for the year ended June 30, 2022.

(1) Amount inc ludes expense attributable to graded vesting of stock opt ions which is not material for the year ended June 30, 2023.

THE ESTÉE LAUDER COMPANIES INC.

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Allowance for credit losses, beginning of period $ 10 $ 20

ASC 326 cumulative effect adjustment (pre-tax) — 4

Adjustment for expected credit losses ( 3 ) ( 8 )

Provision (adjustment) for expected credit losses 6 ( 3 )

Write-offs, net & other — ( 7 )

Allowance for credit losses, end of period $ 16 10

The remaining balance of the allowance for doubtful accounts of $ 17 million, as of June 30, 2022, relates to non-credit losses, which are primarily due to customer deductions.

The remaining balance of the allowance for doubtful accounts and customer deductions of $ 14 million and $ 17 million, as of June 30, 2023 and June 30, 2022, respectively, relates to non-credit losses, which are primarily due to customer deductions.

Deferred Revenue

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Deferred revenue, end of period $ 572 $ 362

The increase in Revenue deferred during the period from fiscal 2022 to fiscal 2023 is driven by the Marcolin licensing arrangement, which consists of a $ 250 million non-refundable upfront payment which is classified as deferred revenue within Other accrued liabilities and Other noncurrent liabilities in the accompanying consolidated balance sheets.

The upfront payment will be recognized on a straight-line basis over the estimated economic life of the license, which is 20 years.

The Company’s deferred revenue balance related to the Marcolin licensing arrangement was $ 235 million at June 30, 2023.

Transaction Price Allocated to the Remaining Performance Obligations

At June 30, 2022, the combined estimated revenue expected to be recognized in the next twelve months related to performance obligations for customer loyalty programs, gift with purchase promotions, purchase with purchase promotions and gift card liabilities that are unsatisfied (or partially unsatisfied) is $ 312 million.

At June 30, 2023, the combined estimated revenue expected to be recognized in the next twelve months related to performance obligations for customer loyalty programs, gift with purchase promotions, purchase with purchase promotions, gift card liabilities, and the Marcolin license arrangement that are unsatisfied (or partially unsatisfied) is $ 323 million.

The remaining balance of deferred revenue at June 30, 2023 will be recognized beyond the next twelve months .

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Royalty Revenue - License Arrangements

As of June 30, 2023, the remaining contractually guaranteed minimum royalty amounts due to the Company during future periods are as follows:

(In millions) Minimum Remaining Royalties

Fiscal 2024 $ 27

Fiscal 2025 $ 28

Fiscal 2026 $ 29

Fiscal 2027 $ 30

Fiscal 2028 $ 32

Thereafter $ 194

The royalty revenue associated with the TOM FORD Acquisition will be included within the The Americas region and within the other product category.

NOTE 15 – PENSION, DEFERRED COMPENSATION AND POST-RETIREMENT BENEFIT PLANS

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In certain instances, the Company adjusts benefits in connection with international employee transfers.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Retirement Growth Account Plan (U.S.)

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Funded status ( 159 ) ( 84 ) 19 17 ( 174 ) ( 163 )

Accumulated other comprehensive loss 172 200 ( 16 ) 15 ( 1 ) 27

Accumulated other comprehensive loss (income) 237 172 ( 9 ) ( 16 ) 7 ( 1 )

Net amount recognized $ 78 $ 88 $ 10 $ 1 $ ( 167 ) $ ( 164 )

For the twelve months ended June 30, 2022, the $ 164 million actuarial gain relating to the U.S.

For fiscal 2023, the $ 30 million actuarial gain relating to the U.S.

pension plans was primarily due to the increase in the weighted average discount rate relating to the Retirement Growth Account Plan and the Restoration Plan from 4.5 % to 5.3 % and 4.3 % to 5.2 %, respectively.

For the twelve months ended June 30, 2021, the actuarial gains and losses affecting the benefit obligations were not material.

For fiscal 2023, the $ 51 million actuarial gain relating to the International pension plans was primarily due to the increase in the weighted average discount rate from 2.8 % to 3.7 %.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For fiscal 2022, the $ 164 million actuarial gain relating to the U.S.

pension plans was primarily due to the increase in the weighted average discount rate relating to the Retirement Growth Account Plan and the Restoration Plan from 3.0 % to 4.5 % and 2.5 % to 4.3 %, respectively.

For fiscal 2022, the $ 82 million actuarial gain relating to the International pension plans was primarily due to the increase in the weighted average discount rate from 1.6 % to 2.8 %.

Pension Plans Other than

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1.00 – 5.50 %

(1) The weighted-average assumptions used to determine benefit obligations at June 30, 2023 were as follows:

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Discount rate - 4.48 % (U.S.), 2.77 % (International) and 4.68 % (Other than Pension Plans, Post-retirement)

Expected return on assets - 6.25 % (U.S.

and Other than Pension Plans, Post-retirement) and 2.19 % (International)

Expected return on assets - 6.25 % (U.S.), 2.95 % (International) and N/A (Other than Pension Plans, Post-retirement)

Rate of compensation increase - 2.50 % - 8.00 %, graded (U.S.), 2.96 % (International) and N/A (Other than Pension Plans, Post-retirement)

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The weighted-average interest crediting rate used to determine the benefit obligation and net periodic benefit cost relating to the Company’s U.S.

Retirement Growth Account Plan was 4.02 % as of and for the years ended June 30, 2022 and 2021.

Retirement Growth Account Plan was 4.00 % and 4.02 % as of and for the years ended June 30, 2023 and 2022, respectively.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans.

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International Post-retirement Total

Net actuarial losses, beginning of year $ 198 $ 20 $ 27 $ 245

Actuarial gains recognized ( 13 ) ( 31 ) ( 27 ) ( 71 )

Net actuarial losses (gains), beginning of year $ 170 $ ( 13 ) $ ( 1 ) $ 156

Actuarial losses recognized 68 4 7 79

Amortization and settlements included in net periodic benefit cost ( 3 ) 2 — ( 1 )

Translation adjustments — — 1 1

Net actuarial losses, end of year 170 ( 13 ) ( 1 ) 156

Net actuarial losses (gains), end of year 235 ( 7 ) 7 235

Net prior service cost, beginning of year 2 ( 3 ) — ( 1 )

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Insurance contracts — — 8 — 8

Limited partnerships and hedge fund investments — — — 115 115

Interests in limited partnerships and hedge fund investments — — — 110 110

Total $ 334 $ 698 $ 8 $ 256 $ 1,296

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Insurance contracts — — 46 — 46

Limited partnerships and hedge fund investments — — — 104 104

Interests in limited partnerships and hedge fund investments — — — 115 115

Total $ 384 $ 736 $ 46 $ 265 $ 1,431

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(2) Unconditional purchase obligations primarily include:

royalty payments pursuant to license agreements, inventory commitments, information technology contract commitments, capital expenditure commitments, advertising commitments and third-party distribution commitments.

inventory commitments, deferred consideration, capital expenditure commitments, information technology contract commitments, royalty payments pursuant to license agreements and advertising commitments.

Future royalty and advertising commitments were estimated based on planned future sales for the term that was in effect at June 30, 2023, without consideration for potential renewal periods.

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As of June 30, 2023, the remaining authorized share repurchase balance was 25.1 million shares.

Subsequent to June 30, 2022 and as of August 17, 2022, the Company purchased approximately 0.2 million additional shares of the Company's Class A Common Stock for $ 63 million pursuant to its share repurchase program.

The following is a summary of cash dividends declared per share on the Company’s Class A and Class B Common Stock during the year ended June 30, 2023:

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As of June 30, 2023, the Company has two active equity compensation plans which include the Amended and Restated Fiscal 2002 Share Incentive Plan (the “Fiscal 2002 Plan”) and the Amended and Restated Non-Employee Director Share Incentive Plan (collectively, the “Plans”).

These Plans currently provide for the issuance of approximately 88.8 million shares of Class A Common Stock, which consist of shares originally provided for and shares transferred to the Fiscal 2002 Plan from other inactive plans and employment agreements, to be granted in the form of stock-based awards to key employees, consultants and non-employee directors of the Company.

As of June 30, 2023, approximately 10.1 million shares of Class A Common Stock were reserved and available to be granted pursuant to these Plans.

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Stock Options

The following is a summary of the Company’s stock option programs as of June 30, 2022 and changes during the fiscal year then ended:

The following is a summary of the status of the Company’s stock options as of June 30, 2023 and activity during the fiscal year then ended:

(Shares in thousands) Shares Weighted-

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Intrinsic value of stock options exercised $ 93 $ 276 $ 407

The fair value of each of the Company's option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

The fair value of each of the Company's option grants were estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Year Ended June 30

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PSUs are accompanied by dividend equivalent rights that will be payable in cash upon settlement of the PSUs and, as such, were valued at the closing market value of the Company’s Class A Common Stock on the date of grant.

In September 2021, approximately 0.2 million shares of the Company’s Class A Common Stock were issued, and related accrued dividends were paid, relative to the target goals set at the time of the issuance, in settlement of 0.2 million PSUs which vested as of June 30, 2021.

In September 2022, approximately 0.2 million shares of the Company’s Class A Common Stock were issued, and related accrued dividends were paid, relative to the target goals set at the time of the issuance, in settlement of 0.1 million PSUs with a performance period ended June 30, 2022.

The following is a summary of the status of the Company’s PSUs as of June 30, 2023 and activity during the fiscal year then ended:

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Nonvested at June 30, 2023 (1)

(1) Included approximately 0.1 million PSUs with a performance period ended June 30, 2022 expected to be issued in September 2022 are included in Nonvested at June 30, 2022.

(1) Includes approximately 0.1 million PSUs with a performance period ended June 30, 2023 expected to be issued in August 2023.

Long-term Performance Share Units

During September 2015, the Company granted PSUs to the Company's Chief Executive Officer (“CEO”) with an aggregate target payout of 387,848 shares (in three tranches of approximately 129,283 each) of the Company’s Class A Common Stock, generally subject to continued employment through the end of relative performance periods, which end June 30, 2018, 2019, and 2020.

Since the Company achieved positive Net Earnings, as defined in the PSU award agreement, for the fiscal year ended June 30, 2016, performance and vesting of each tranche will be based on the Company achieving positive Cumulative Operating Income, as defined in the PSU award agreement, during the relative performance period.

Payment with respect to a tranche will be made on the third anniversary of the last day of the respective performance period.

The PSUs are accompanied by dividend equivalent rights that will be payable in cash at the same time as the payment of shares of Class A Common Stock.

Since the Company achieved positive Net Earnings, as defined in the PSU award agreement, for the fiscal year ended June 30, 2016, performance and vesting of each tranche was based on the Company achieving positive Cumulative Operating Income, as defined in the PSU award agreement, during the relative performance period.

Payment with respect to a tranche was made on the third anniversary of the last day of the respective performance period.

The PSUs are accompanied by dividend equivalent rights that was payable in cash at the same time as the payment of shares of Class A Common Stock.

The grant date fair value of these PSUs of $ 30 million was estimated using the closing stock price of the Company’s Class A Common Stock as of September 4, 2015, the date of grant.

Through June 30, 2022, 258,565 shares of the Company’s Class A Common Stock were issued, and the related dividends paid, in accordance with the terms of the grant, related to the performance periods ended June 30, 2018 and 2019.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2023, all 387,848 shares of the Company’s Class A Common Stock were issued, and the related dividends paid, in accordance with the terms of the grant, related to the performance periods ended June 30, 2018, 2019, and 2020.

In February 2018, the Company granted to the Company's CEO PSUs with an aggregate payout of 195,940 shares (in two tranches of 97,970 shares each) of the Company’s Class A Common Stock, generally subject to continued employment through the end of the respective performance periods ending June 30, 2021 and 2022.

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Since the Company achieved positive Cumulative Operating Income, as defined in the PSU award agreement, and since the executive completed the requisite service, 195,940 shares of the Company’s Class A Common Stock are anticipated to be issued, and the related dividends to be paid, in accordance with the terms of the grant on September 3, 2024.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In March 2021, the Company granted to the Company’s CEO PSUs with an aggregate payout of 68,578 shares of the Company's Class A Common Stock, to incentivize him to continue serving through at least June 30, 2024.

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The Stock Price Goals (per Share) were all achieved during fiscal 2022 but delivery of the shares are still subject to achievement of the Cumulative Operating Income goal and other terms and conditions in accordance with the terms of the award agreement .

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Generally, delivery of shares of the Company’s Class A Common Stock, if any, will be made on September 2, 2025.

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Expected term 3.3 years

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company grants share units to certain non-employee directors under the Amended and Restated Non-Employee Director Share Incentive Plan.

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The DECIEM stock options are subject to the terms and conditions of the DECIEM 2021 Stock Option Plan.

As of June 30, 2022, post-combination vested options totaled 92,028 options and post-combination unvested options totaled 2,073 options.

As of June 30, 2023, all 94,101 post-combination options were vested.

The DECIEM stock options are liability-classified awards as they are expected to be settled in cash and are remeasured to fair value at each reporting date through date of settlement.

Total stock-based compensation expense is attributable to the exchange or replacement of and the remaining requisite service period of stock options.

Due to a reduction in the fair value of the DECIEM stock options, the total stock option expense for the year ended June 30, 2022 resulted in income of $ 55 million, net of foreign currency remeasurements.

The total stock option expense (income) , net of foreign currency remeasurements, for the year ended June 30, 2023 and 2022 was $ 22 million and $( 55 ) million, respectively and the total stock option expense from the date of acquisition to June 30, 2021 was $ 40 million.

There is no related income tax benefit on the DECIEM stock-based compensation expense.

There were no DECIEM stock options exercised during the year ended June 30, 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2022, the total unrecognized compensation cost related to unvested stock awards of the DECIEM Stock Option Plan was not material and the related weighted-average period over which it is expected to be recognized is approximately one year .

The following is a summary of the DECIEM stock option program as of June 30, 2023 and changes during the fiscal year then ended:

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94.1 58.48 $ 104 0.92

Vested and expected to vest at June 30, 2022

Vested at June 30, 2023

94.1 58.48 $ 104 0.92

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(1) The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option.

Stock option grants to individuals under the DECIEM Stock Option Plan will vest between two to seven tranches over a service period of up to two years .

The Company attributes the value of option awards under the DECIEM Stock Option Plan on a graded vesting basis where awards vest at specified rates over a specified period.

Stock options granted to individuals under the DECIEM Stock Option Plan vested between two to seven tranches over a service period of up to two years and as of June 30, 2023, all post-combination options were vested.

The Company attributed the value of option awards under the DECIEM Stock Option Plan on a graded vesting basis where awards vested at specified rates over a specified period.

The following is a summary of the per-share weighted-average grant date fair value of stock options granted and total intrinsic value of stock options exercised:

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As discussed in Note 5 – Acquisition of Businesses, DECIEM stock options, with total fair value of $ 295 million, were reported as part of the total consideration transferred.

The DECIEM stock options are reported as a stock option liability of $ 74 million and $ 141 million in Other noncurrent liabilities in the accompanying consolidated balance sheets at June 30, 2022 and June 30, 2021, respectively.

As discussed in Note 5 – Business and Asset Acquisitions, DECIEM stock options, with total fair value of $ 295 million, were reported as part of the total consideration transferred.

The DECIEM stock options are reported as a stock option liability of $ 99 million in Other accrued liabilities and $ 74 million in Other noncurrent liabilities in the accompanying consolidated balance sheets at June 30, 2023 and June 30, 2022, respectively.

The fair value of the stock options were calculated by incorporating significant assumptions including the starting equity value, revenue growth rates and EBITDA and the following key assumptions into the Monte Carlo Method:

June 30, 2022 June 30, 2021 May 18, 2021

June 30, 2023 June 30, 2022 June 30, 2021

Risk-free rate 4.90 % 3.20 % 0.50 %

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Interest rate-related derivatives (3)

Cross-currency swap contracts (1)(4)

Benefit (provision) for deferred income taxes on reclassification (5)

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Net prior service cost ( 1 ) ( 1 ) ( 1 )

Settlements 1 — —

Provision for deferred income taxes on reclassification (5)

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Translation adjustments (7)

( 112 ) ( 409 ) 145

Benefit (provision) for deferred income taxes 27 ( 18 ) 2

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Accumulated other comprehensive loss $ ( 934 ) $ ( 762 ) $ ( 470 )

(1) Includes the gain recognized in AOCI from cross-currency swap contracts which represents the amount excluded from effectiveness testing.

(2) Amounts recorded in Net Sales in the accompanying consolidated statements of earnings.

(3) Amounts recorded in Interest expense in the accompanying consolidated statements of earnings.

(4) Amounts recorded in Selling, general and administrative in the accompanying consolidated statements of earnings.

(5) Amounts recorded in Provision for income taxes in the accompanying consolidated statements of earnings.

(6) See Note 15 – Pension, Deferred Compensation and Post-Retirement Benefit Plans for additional information .

(7) See Note 12 – Derivative Financial Instruments for gains (losses) relating to net investment hedges.

THE ESTÉE LAUDER COMPANIES INC.

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Non-cash investing and financing activities:

Capitalized interest and asset retirement obligations incurred $ 13 $ 6 $ 3

Deferred consideration payable $ 300 $ 38 $ —

Property, plant and equipment accrued but unpaid $ 246 $ 106 $ 97

Purchase price payable - shares purchased from noncontrolling interests $ 38 $ — $ —

Purchase price payable - DECIEM stock option $ — $ 103 $ —

Purchase price refund receivable $ — $ — $ 32

NOTE 22 – SEGMENT DATA AND RELATED INFORMATION

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These product categories meet the definition of operating segments and, accordingly, additional financial data are provided below.

The “other” segment includes the sales and related results of ancillary products and services that do not fit the definition of skin care, makeup, fragrance and hair care.

The other segment includes the sales and related results of ancillary products and services that do not fit the definition of skin care, makeup, fragrance and hair care, including royalty revenue associated with the license of the TOM FORD trademark as discussed in Note 14 - Revenue Recognition .

Product category performance is measured based upon net sales before returns associated with restructuring and other activities, and earnings before income taxes, other components of net periodic benefit cost, interest expense, interest income and investment income, net, other income, net and charges associated with restructuring and other activities.

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Net sales in mainland China, as well as net sales from travel retail locations, in fiscal 2023, 2022 and 2021 were approximately 28 %, 34 % and 36 % of consolidated net sales, respectively.

In fiscal 2022, net sales in Korea, including net sales from travel retail locations, were approximately 11 % and no other country represented greater than 10% of the Company’s consolidated net sales.

In fiscal 2023 and 2022, net sales in Korea, including net sales from travel retail locations, were approximately 10 % and 11 %, respectively, and no other country represented greater than 10% of the Company’s consolidated net sales.

The Company’s long-lived assets in the United States at June 30, 2023, 2022 and 2021 were $ 2,136 million, $ 2,153 million and $ 2,075 million, respectively.

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4.28 Form of Global Note for the 1.950% Senior Notes due 2031 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on March 4, 2021) (SEC File No.

4.30 Form of Global Note for the 4.375% Senior Notes due 2028 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No.

4.32 Form of Global Note for the 4.650% Senior Notes due 2033 (included as Exhibit A in Exhibit 4.3 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No.

4.34 Form of Global Note for the 5.150% Senior Notes due 2053 (included as Exhibit A in Exhibit 4.5 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No.

10.1 Stockholders’ Agreement, dated November 22, 1995 (filed as Exhibit 10.1 to our Annual Report on Form 10-K filed on September 15, 2003) (SEC File No.

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7 to Stockholders’ Agreement (filed as Exhibit 10.7 to our Quarterly Report on Form 10-Q filed on October 30, 2009) (SEC File No.

Number Description

10.2 Registration Rights Agreement, dated November 22, 1995 (filed as Exhibit 10.2 to our Annual Report on Form 10-K filed on September 15, 2003) (SEC File No.

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10.2d Fourth Amendment to Registration Rights Agreement (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on January 29, 2004) (SEC File No.

Number Description

10.3 The Estee Lauder Companies Retirement Growth Account Plan, as amended and restated, effective as of January 1, 201 9 , as further amended through January 1, 2022 (filed as Exhibit 10.

2 to our Quarterly Report on Form 10- Q filed on February 3, 2022 ) (SEC File No.