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Item 9A. Controls and Procedures

2024-08-19 compared with 2023-08-18 · 790 added, 765 removed, 2108 unchanged (42% of the section changed)

8 unchanged sentences

During the fiscal 2024 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.

4 unchanged sentences

The 2024 Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, 2024 and such information is incorporated herein by reference.

The Company has an insider trading policy which governs the purchase, sale, and/or other dispositions of our securities (and related derivative securities) by directors, officers and employees and other covered persons and is designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company.

A copy of our Securities Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

Executive Compensation .

2 unchanged sentences

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item, not already provided under Equity Compensation Plan Information as set forth below, will be included in the 2023 Proxy Statement.

The information required by this Item will be included in the 2024 Proxy Statement.

The 2024 Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, 2024 and such information is incorporated herein by reference.

Equity Compensation Plan Information

The following table summarizes the equity compensation plans under which our securities may be issued as of June 30, 2023 and does not include grants made or cancelled and options exercised after such date.

The securities that may be issued consist solely of shares of our Class A Common Stock and all plans were approved by stockholders of the Company.

Equity Compensation Plan Information as of June 30, 2023

Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (2)

Weighted-average exercise price of outstanding options, warrants and rights (3)

Number of securities remaining available for future issuance under equity compensation plans

(excluding securities reflected in the first column) (4)

Equity compensation plans approved by security holders (1)

10,351,905 $184.41 10,114,324

(1) Includes the Amended and Restated Fiscal 2002 Share Incentive Plan (the “2002 Plan”) and the Amended and Restated Non-Employee Director Share Incentive Plan (the “Director Plan”).

(2) Consists of 7,497,084 shares issuable upon exercise of outstanding options, 1,789,851 shares issuable upon conversion of outstanding Restricted Stock Units, 601,845 shares issuable upon conversion of outstanding Performance Share Units (“PSUs”) (assuming maximum payout for unvested PSUs and PSUs vested as of June 30, 2023 pending approval by the Stock Plan Subcommittee of our Board of Directors), 112,680 shares issuable upon conversion of Share Units and 350,445 shares issuable upon conversion of Long-term PSUs, including P rice-vested units (“PVUs”) .

(3) Calculated based upon outstanding options in respect of 7,497,084 shares of our Class A Common Stock.

(4) The 2002 Plan authorizes the grant of shares and benefits other than stock options.

As of June 30, 2023, there were 9,684,436 shares of Class A Common Stock available for issuance under the 2002 Plan (subject to the approval by the Stock Plan Subcommittee of expected payouts for PSUs vested as of June 30, 2023).

Shares underlying grants cancelled or forfeited under prior plans or agreements may be used for grants under the 2002 Plan.

The Director Plan currently provides for an annual grant of options and stock units to non-employee directors.

As of June 30, 2023, there were 429,888 shares available for issuance under the Director Plan.

If all of the outstanding options, warrants, rights, stock units and share units, as well as the securities available for future issuance, included in the first and third columns in the table above were converted to shares of Class A Common Stock as of June 30, 2023, the total shares of Common Stock outstanding (i.e.

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

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.

Certain Relationships and Related Transactions, and Director Independence.

23 unchanged sentences

Global Note for the 3.700% Senior Notes due 2042 (filed as Exhibit 4.4 to our Current Report on Form 8-K filed on August 2, 2012) (SEC File No.

4.9 Officers’ Certificate, dated August 2, 2012, defining certain terms of the 3.700% Senior Notes due 2042 (filed as Exhibit 4.2 to our Current Report on Form 8-K filed on August 2, 2012) (SEC File No.

4.10 Global Note for the 3.700% Senior Notes due 2042 (filed as Exhibit 4.4 to our Current Report on Form 8-K filed on August 2, 2012) (SEC File No.

Officers’ Certificate, dated June 4, 2015, defining certain terms of the 4.375% Senior Notes due 2045 (filed as Exhibit 4.1 to our Current Report on Form 8-K filed on June 4, 2015) (SEC File No.

6 unchanged sentences

Form of Global Note for the 4.150% Senior Notes due 2047 (included as Exhibit A in Exhibit 4.5 to our Current Report on Form 8-K filed on February 9, 2017) (SEC File No.

Number Description

Officers’ Certificate, dated November 21, 2019, defining certain terms of the 2.000% Senior Notes due 2024 (filed as Exhibit 4.1 to our Current Report on Form 8-K filed on November 21, 2019) (SEC File No.

Number Description

Form of Global Note for the 2.000% Senior Notes due 2024 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on November 21, 2019) (SEC File No.

13 unchanged sentences

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.

Officers’ Certificate, dated February 14, 2024, defining certain terms of the 5.000% Senior Notes due 2034 (filed as Exhibit 4.1 to our Current Report on Form 8-K filed on February 14, 2024) (SEC File No.

Form of Global Note for the 5.000% Senior Notes due 2034 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on February 14, 2024) (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.

11 unchanged sentences

6 to Stockholders’ Agreement (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on January 27, 2005) (SEC File No.

Number Description

10.1g Amendment No.

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.

9 unchanged sentences

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.

10.5a Executive Annual Incentive Plan (filed as Exhibit 10.5a to our Annual Report on Form 10-K filed on August 18, 2023) (SEC File No.

10.6 Employment Agreement with Tracey T.

18 unchanged sentences

Lauder (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on September 17, 2010) (SEC File No.

Number Description

10.8a Amendment to Employment Agreement with William P.

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.

2 unchanged sentences

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.

10.12 Employment Agreement with Peter Jueptner (filed as Exhibit 10.12 to our Annual Report on Form 10-K filed on August 18, 2023) (SEC File No.

Employment Agreement with Stéphane de La Faverie (SEC File No.

Employment Agreement with Akhil Shrivastava (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on July 23, 2024) (SEC File No.

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.

10.13a Form of Deferred Compensation Agreement (interest-based) with Outside Directors (including Election Form) (filed as Exhibit 10.12a to our Annual Report on Form 10-K filed on August 24, 2018) (SEC File No.

Form of Deferred Compensation Agreement (interest-based) with Outside Directors (including Election Form) (filed as Exhibit 10.12a to our Annual Report on Form 10-K filed on August 24, 2018) (SEC File No.

Form of Deferred Compensation Agreement (stock-based) with Outside Directors (filed as Exhibit 10.15 to our Annual Report on Form 10-K filed on September 17, 2001) (SEC File No.

10.14a Form of Deferred Compensation Agreement (stock-based) with Outside Directors (including Election Form) (filed as Exhibit 10.13a to our Annual Report on Form 10-K filed on August 24, 2018) (SEC File No.

Form of Deferred Compensation Agreement (stock-based) with Outside Directors (including Election Form) (filed as Exhibit 10.13a to our Annual Report on Form 10-K filed on August 24, 2018) (SEC File No.

The Estee Lauder Companies Inc.

Non-Employee Director Share Incentive Plan (as amended and restated on November 9, 2007) (filed as Exhibit 99.1 to our Registration Statement on Form S-8 filed on November 9, 2007) (SEC File No.

10.15a The Estee Lauder Companies Inc.

The Estee Lauder Companies Inc.

Non-Employee Director Share Incentive Plan (as amended on July 14, 2011) (filed as exhibit 10.15a to our Annual Report on Form 10-K filed on August 22, 2011) (SEC File No.

10.15b The Estée Lauder Companies Inc.

The Estée Lauder Companies Inc.

Amended and Restated Non-Employee Director Share Incentive Plan (filed as Exhibit 10.2 to our Current Report on Form 8-K filed on November 16, 2015) (SEC File No.

10.15c The Estée Lauder Companies Inc.

The Estée Lauder Companies Inc.

Amended and Restated Non-Employee Director Share Incentive Plan (as of November 1, 2017) (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November 1, 2017) (SEC File No.

10.15d The Estée Lauder Companies Inc.

The Estée Lauder Companies Inc.

Amended and Restated Non-Employee Director Share Incentive Plan (as of August 22, 2019) (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on October 31, 2019) (SEC File No.

10.15e The Estée Lauder Companies Inc.

The Estée Lauder Companies Inc.

Amended and Restated Non-Employee Director Share Incentive Plan (as of July 13, 2021) (filed as Exhibit 10.15e to our Annual Report on Form 10-K filed on August 27, 2021) (SEC File No.

Summary of Compensation For Non-Employee Directors of the Company (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on November 1, 2013) (SEC File No.

10.16a Summary of Compensation For Non-Employee Directors of the Company (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on November 1, 2017) (SEC File No.

10.16b Summary of Compensation For Non-Employee Directors of the Company (filed as Exhibit 10.16b to our Annual Report on Form 10-K filed on August 27, 2021) (SEC File No.

Summary of Compensation For Non-Employee Directors of the Company (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on November 1, 2017) (SEC File No.

Summary of Compensation For Non-Employee Directors of the Company (filed as Exhibit 10.16b to our Annual Report on Form 10-K filed on August 27, 2021) (SEC File No.

Number Description

Form of Stock Option Agreement for Annual Stock Option Grants under Non-Employee Director Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 99.2 to our Registration Statement on Form S-8 filed on November 9, 2007) (SEC File No.

10.17a Form of Stock Option Agreement for Annual Stock Option Grants under the Amended and Restated Non-Employee Director Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on October 31, 2019) (SEC File No.

Form of Stock Option Agreement for Annual Stock Option Grants under the Amended and Restated Non-Employee Director Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on October 31, 2019) (SEC File No.

The Estée Lauder Companies Inc.

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.

The Estée Lauder Companies Inc.

Amended and Restated Fiscal 2002 Share Incentive Plan (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on November 16, 2015) (SEC File No.

10.18b The Estée Lauder Companies Inc.

The Estée Lauder Companies Inc.

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

10.18c The Estée Lauder Companies Inc.

The Estée Lauder Companies Inc.

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.

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

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.

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

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.

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

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.

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

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.

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

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.

10.18i 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.

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

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.

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

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.

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

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.

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

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.

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

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.

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

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.

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

Number Description

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.

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

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.

Number Description

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

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.

10.19 $2.5 Billion Credit Facility, dated as of October 22, 2021, among The Estée Lauder Companies Inc., the Eligible Subsidiaries of the Company, as defined therein, the lenders listed therein, and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on October 22, 2021) (SEC File No.

$2.5 Billion Credit Facility, dated as of June 7, 2024 among The Estée Lauder Companies Inc., the Eligible Subsidiaries of the Company, as defined therein, the lenders listed therein, and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 7, 2024) (SEC File No.

Services Agreement, dated January 1, 2003, among Estee Lauder Inc., Melville Management Corp., Leonard A.

1 unchanged sentence

Lauder (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on January 28, 2010) (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.

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.

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

3 unchanged sentences

Lauder (filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q filed on January 28, 2010) (SEC File No.

10.22a First Amendment to Sublease, dated February 28, 2007, between Aramis Inc.

First Amendment to Sublease, dated February 28, 2007, between Aramis Inc.

and RSL Management Corp.

(filed as Exhibit 10.5 to our Quarterly Report on Form 10-Q filed on January 28, 2010) (SEC File No.

10.22b Second Amendment to Sublease, dated January 27, 2010, between Aramis Inc.

Second Amendment to Sublease, dated January 27, 2010, between Aramis Inc.

and RSL Management Corp.

(filed as Exhibit 10.6 to our Quarterly Report on Form 10-Q filed on January 28, 2010) (SEC File No.

10.22c Third Amendment to Sublease, dated November 3, 2010, between Aramis Inc., and RSL Management Corp.

Third Amendment to Sublease, dated November 3, 2010, between Aramis Inc., and RSL Management Corp.

(filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on February 4, 2011) (SEC File No.

10.22d Fourth Amendment to Sublease, dated March 4, 2020, between Aramis Inc.

Fourth Amendment to Sublease, dated March 4, 2020, between Aramis Inc.

and RSL Management Corp.

4 unchanged sentences

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.

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

First Amendment to Creative Consultant Agreement between Estee Lauder Inc.

and Aerin Lauder Zinterhofer dated October 28, 2014 (filed as Exhibit 10.23a to our Annual Report on Form 10-K filed on August 20, 2015) (SEC File No.

10.24b Second Amendment to Creative Consultant Agreement between Estee Lauder Inc.

Second Amendment to Creative Consultant Agreement between Estee Lauder Inc.

and Aerin Lauder Zinterhofer effective July 1, 2016 (filed as Exhibit 10.23b to our Annual Report on Form 10-K filed on August 24, 2016) (SEC File No.

10.24c Third Amendment to Creative Consultant Agreement between Estee Lauder Inc.

Third Amendment to Creative Consultant Agreement between Estee Lauder Inc.

and Aerin Lauder Zinterhofer effective July 1, 2021 (filed as Exhibit 10.24c to our Annual Report on Form 10-K filed on August 27, 2021) (SEC File No.

Fourth Amendment to Creative Consultant Agreement between Estee Lauder Inc.

and Aerin Lauder Zinterhofer effective July 1, 2024.†

Number Description

License Agreement, dated April 6, 2011, by and among Aerin LLC, Aerin Lauder Zinterhofer and Estee Lauder Inc.

(filed as Exhibit 10.2 to our Current Report on Form 8-K filed on April 8, 2011) (SEC File No.

10.25a First Amendment to the April 6, 2011 License Agreement, dated January 22, 2019, by and among Aerin LLC, Aerin Lauder Zinterhofer and Estee Lauder Inc.

First Amendment to the April 6, 2011 License Agreement, dated January 22, 2019, by and among Aerin LLC, Aerin Lauder Zinterhofer and Estee Lauder Inc.

(filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on May 1, 2019) (SEC File No.

10.25b Second Amendment to the April 6, 2011 License Agreement, dated February 22, 2019, by and among Aerin LLC, Aerin Lauder Zinterhofer and Estee Lauder Inc.

Second Amendment to the April 6, 2011 License Agreement, dated February 22, 2019, by and among Aerin LLC, Aerin Lauder Zinterhofer and Estee Lauder Inc.

(filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on May 1, 2019) (SEC File No.

The Estée Lauder Companies Inc.

Insider Trading Policies.

21.1 List of significant subsidiaries.

Number Description

23.1 Consent of PricewaterhouseCoopers LLP.

6 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (CFO).

The Estée Lauder Companies Inc.

Incentive-Based Compensation Recovery Policy (2023 Clawback Policy).

101.1 The following materials from The Estée Lauder Companies Inc.’s Annual Report on Form 10-K for the year ended June 30, 2024 are formatted in iXBRL (Inline eXtensible Business Reporting Language):

19 unchanged sentences

and a Director August 19, 2024

LAUDER* Director August 18, 2023

CHARLENE BARSHEFSKY* Director August 19, 2024

Charlene Barshefsky

WEI SUN CHRISTIANSON* Director August 18, 2023

Wei Sun Christianson

ANGELA WEI DONG* Director August 19, 2024

3 unchanged sentences

Jennifer Hyman

Director August 19, 2024

JANE LAUDER* Director August 19, 2024

78 unchanged sentences

Critical Audit Matters

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;

(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 weighted average cost of capital;

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.

Annual Indefinite-Lived Intangible Assets Impairment Assessments – TOM FORD and Dr.Jart+ Trademarks

As described in Notes 2, 5 and 6 to the consolidated financial statements, the Company’s consolidated indefinite-lived intangible assets balance was $4,107 million as of June 30, 2024, of which $2,578 million and $129 million relate to the TOM FORD trademark and the Dr.Jart+ trademark, respectively.

Management assesses 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.

Based on the annual impairment testing as of April 1, 2024, management determined that the carrying value of the Dr.Jart+ trademark exceeded its estimated fair value and recorded an impairment charge of $180 million.

As disclosed by management, the estimated fair value of the TOM FORD trademark exceeded its carrying value.

The estimated fair value of the trademark intangible assets was determined utilizing an income approach, specifically the relief-from-royalty method.

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

The principal considerations for our determination that performing procedures relating to the annual indefinite-lived intangible assets impairment assessments of the TOM FORD and Dr.Jart+ trademarks is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the trademarks;

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 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 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;

These procedures included testing the effectiveness of controls relating to management’s indefinite-lived intangible assets impairment assessments, including controls over the valuation of the TOM FORD and Dr.Jart+ trademarks.

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

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

(iii) testing the completeness and accuracy of the underlying data used in the relief-from-royalty method;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, royalty rates, and the 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 trademarks;

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

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.

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 royalty rates and weighted average cost of capital significant assumptions.

/s/ PricewaterhouseCoopers LLP

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Goodwill impairment 291 — —

Impairment of other intangible and long-lived assets 207 241 134

Impairment of other intangible assets

Total operating expenses 10,214 9,837 10,262

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Net earnings attributable to noncontrolling interests — — ( 7 )

Net loss (earnings) attributable to redeemable noncontrolling interest ( 4 ) ( 11 ) 7

Net earnings attributable to redeemable noncontrolling interest

( 19 ) ( 4 ) ( 11 )

Net earnings attributable to The Estée Lauder Companies Inc.

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Net cash flow hedge gain (loss) ( 3 ) ( 11 ) 91

Cross-currency swap contract loss ( 20 ) — —

Cross-currency swap contract gain (loss)

Retirement plan and other retiree benefit adjustments ( 9 ) ( 79 ) 87

1 unchanged sentence

Benefit (provision) for income taxes on components of other comprehensive income ( 6 ) 51 ( 61 )

Total other comprehensive income (loss), net of tax ( 186 ) ( 321 ) 179

Total other comprehensive loss, net of tax

( 150 ) ( 186 ) ( 321 )

Comprehensive income 259 824 2,087

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Comprehensive loss (income) attributable to redeemable noncontrolling interest:

Net loss (earnings) ( 4 ) ( 11 ) 7

Net earnings ( 19 ) ( 4 ) ( 11 )

Translation adjustments 17 14 25

Total comprehensive loss attributable to redeemable noncontrolling interest 10 14 24

Total comprehensive loss (income) attributable to redeemable noncontrolling interest

Comprehensive income attributable to The Estée Lauder Companies Inc.

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CONSOLIDATED BALANCE SHEETS

(In millions, except share data) 2023 2022

(In millions, except share and per share data)

Current assets

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Purchase of shares from noncontrolling interests — — ( 19 )

Purchase of shares from redeemable noncontrolling interest

Paid-in capital, end of year 6,685 6,153 5,796

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Accumulated other comprehensive loss, beginning of year ( 934 ) ( 762 ) ( 470 )

Other comprehensive income (loss) attributable to The Estée Lauder Companies Inc.

Other comprehensive loss attributable to The Estée Lauder Companies Inc.

( 133 ) ( 172 ) ( 292 )

Purchase of shares from redeemable noncontrolling interest

Accumulated other comprehensive loss, end of year ( 1,140 ) ( 934 ) ( 762 )

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Net earnings attributable to noncontrolling interests — — 7

Distribution to noncontrolling interest holders — — ( 6 )

Purchase of shares from noncontrolling interests — — ( 34 )

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Redeemable noncontrolling interest, beginning of year $ 832 $ 842 $ 857

Acquired redeemable noncontrolling interest — — 881

Net earnings (loss) attributable to redeemable noncontrolling interest 4 11 ( 7 )

Net earnings attributable to redeemable noncontrolling interest

Purchase of shares from redeemable noncontrolling interest

Translation adjustments ( 17 ) ( 14 ) ( 25 )

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Pension and post-retirement benefit contributions ( 116 ) ( 49 ) ( 56 )

Goodwill, other intangible and long-lived asset impairments 207 241 188

Changes in fair value of contingent consideration — — ( 2 )

Impairment of goodwill and other intangible assets

Gain on previously held equity method investment — — ( 1 )

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Decrease (increase) in accounts receivable, net ( 285 ) 185 ( 10 )

Increase in inventory and promotional merchandise ( 64 ) ( 602 ) ( 140 )

Decrease (increase) in inventory and promotional merchandise

766 ( 64 ) ( 602 )

Decrease (increase) in other assets, net 15 26 ( 101 )

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Capital expenditures ( 919 ) ( 1,003 ) ( 1,040 )

Proceeds from purchase price refund — — 32

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

Payments for acquired business

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

3 unchanged sentences

Cash flows from financing activities

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

Proceeds (repayments) of current debt, net ( 215 ) 218 ( 4 )

Proceeds from issuance of commercial paper (maturities after three months)

Repayments of commercial paper (maturities after three months)

Proceeds from issuance of long-term debt, net 648 1,995 —

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Payment for acquisition of noncontrolling interest — — ( 15 )

Payments for acquisition of redeemable noncontrolling interest

Payments to acquire treasury stock ( 35 ) ( 271 ) ( 2,309 )

Settlement of cross-currency swaps

Dividends paid to stockholders ( 947 ) ( 925 ) ( 840 )

Payments to noncontrolling interest holders for dividends — — ( 8 )

Payments of contingent consideration — — ( 2 )

Net cash flows provided by (used for) financing activities ( 2,035 ) 1,590 ( 3,036 )

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The Estée Lauder Companies Inc.

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

is also the global licensee of the AERIN, BALMAIN and Dr.

Andrew Weil brand names for fragrances and cosmetics.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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All assets and liabilities of foreign subsidiaries and affiliates are translated at year-end rates of exchange, while revenue and expenses are translated at monthly average rates of exchange for the period.

Unrealized translation gains (losses), net of tax, reported as translation adjustments through other comprehensive income (loss) (“OCI”) attributable to The Estée Lauder Companies Inc.

Unrealized translation losses, net of tax, reported as translation adjustments through other comprehensive income (loss) (“OCI”) attributable to The Estée Lauder Companies Inc.

were $ 135 million, $ 85 million and $ 427 million, net of tax, in fiscal 2024, 2023 and 2022, respectively.

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Accounts Receivable

Accounts receivable, net is stated net of the allowance for doubtful accounts and customer deductions.

Accounts receivable, net is stated net of the allowance for doubtful accounts, including credit losses, and customer deductions.

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

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Promotional merchandise is charged to expense at the time the merchandise is shipped to the Company’s customers.

Included in inventory and promotional merchandise is an inventory obsolescence reserve, which represents the difference between the cost of the inventory and its estimated realizable value.

Included in inventory and promotional merchandise is an inventory obsolescence reserve, which represents the difference between the cost of the inventory and its net realizable value.

This reserve is calculated using an estimated obsolescence percentage applied to the inventory based on age and historical results.

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The Company’s derivative financial instruments are recorded as either assets or liabilities on the balance sheet and measured at fair value.

All derivatives are (i) designated as a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value” hedge), (ii) designated as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge), or (iii) not designated as a hedging instrument.

Changes in the fair value of a derivative that is designated and qualifies as a fair value hedge are recorded in current-period earnings, along with the loss or gain on the hedged asset or liability that is attributable to the hedged risk (including losses or gains on unrecognized firm commitments).

Changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge of a forecasted transaction are recorded in OCI.

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.

This process includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions.

At inception, the Company evaluates the effectiveness of hedge relationships quantitatively, and has elected to perform, after initial evaluation, qualitative effectiveness assessments of certain hedge relationships to support an ongoing expectation of high effectiveness, if effectiveness testing is required.

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.

For a fair value hedge, changes in the fair value of a derivative are recorded in current-period earnings, along with the loss or gain on the hedged asset or liability that is attributable to the hedged risk (including losses or gains on unrecognized firm commitments).

For a cash flow hedge, changes in the fair value of a derivative of a forecasted transaction are recorded in OCI.

Gains and losses deferred in OCI are then recognized in current-period earnings when earnings are affected by the variability of cash flows of the hedged forecasted transaction (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings).

Changes in the fair value of derivative instruments not designated as hedging instruments are reported in current-period earnings.

All derivative gains and losses relating to cash flow hedges and fair value hedges are recognized in the same income statement line as the hedged items.

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 net gain or loss on these contracts is recorded within translation adjustments, as a component of AOCI on the Company’s consolidated balance sheets, until the sale or substantially complete liquidation of the underlying assets of the Company’s investment.

For derivative instruments, such as foreign currency forward contracts or option contracts, not designated as hedging instruments, changes in the fair value are reported in current-period earnings.

All derivative gains and losses relating to fair value hedges and cash flow hedges are recognized in the same income statement line as the hedged items.

Cash flows from derivatives are classified within the consolidated statements of cash flows in the same category as the items being hedged.

The cross-currency swap contracts designated as fair value hedges are classified within financing activities.

The foreign currency forward contracts designated as net investment hedges are classified within investing activities, except the portion related to the excluded component which is classified within operating activities.

Cash flows, and their related gains and losses, from the cash flow hedges and derivative instruments not designated as hedging instruments are classified within operating activities.

See Note 13 – Derivative Financial Instruments for further discussion.

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Costs incurred for computer software developed or obtained for internal use are capitalized during the application development stage and expensed as incurred during the preliminary project and post-implementation stages.

Costs incurred for website development are capitalized within each applicable development stage as required.

Capital costs incurred while an asset is being built are classified as construction in progress and are reclassified to its respective asset class when placed into service.

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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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Business Combinations and Asset Acquisitions

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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 – Business and Asset Acquisitions for further information.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

See Note 5 – Asset Acquisition for further information.

Goodwill and Other Indefinite-lived Intangible Assets

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The Company uses a single quantitative step when determining the subsequent measurement of goodwill by comparing the fair value of a reporting unit with its carrying amount and recording an impairment charge for the amount that the carrying amount exceeds the fair value, up to the total amount of goodwill allocated to that reporting unit.

When testing other indefinite-lived intangible assets for impairment, the Company also has the option of first performing a qualitative assessment to determine whether it is more-likely-than-not that the indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform a quantitative test.

The quantitative impairment test for indefinite-lived intangible assets encompasses calculating the fair value of an indefinite-lived intangible asset and comparing the fair value to its carrying value.

When testing other indefinite-lived intangible assets for impairment, the Company also has the option of first performing a qualitative assessment to determine whether it is more-likely-than-not that the other indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform a quantitative test.

The quantitative impairment test for other indefinite-lived intangible assets encompasses calculating the fair value of an other indefinite-lived intangible asset and comparing the fair value to its carrying value.

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

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-Lived Assets

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The Company’s lease term at the commencement date may reflect options to extend or terminate the lease when it is reasonably certain that such options will be exercised.

To determine the present value of the lease liability, the Company uses an incremental borrowing rate, which is defined as the rate of interest that the Company would have to pay to borrow (on a collateralized basis over a similar term) an amount equal to the lease payments in similar economic environments.

To determine the present value of the lease liability, if the rate implicit in the lease is not readily determinable, the Company uses an incremental borrowing rate, which is defined as the rate of interest that the Company would have to pay to borrow (on a collateralized basis over a similar term) an amount equal to the lease payments in similar economic environments.

The ROU asset is based on the corresponding lease liability adjusted for certain costs such as initial direct costs, prepaid lease payments and lease incentives received.

4 unchanged sentences

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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

9 unchanged sentences

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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

6 unchanged sentences

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.

The Company’s largest customer for the year ended June 30, 2024 sells products primarily in China travel retail.

This customer accounted for $ 206 million, or 12 %, and $ 49 million, or 3 %, of the Company's accounts receivable at June 30, 2024 and 2023, respectively.

Revenue Recognition

4 unchanged sentences

In the Americas region, revenue is generally recognized at the time the product is made available and provided to the customer’s carrier at the Company’s location, and in the Europe, the Middle East & Africa and Asia/Pacific regions, revenue is generally recognized based upon the customer’s receipt.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company also sells direct to consumers at Company-operated freestanding stores and online through Company-owned and operated e-commerce and m-commerce sites and through third-party online malls.

The Company has certain arrangements with customers whereby it is responsible for shipping and handling through the named place of destination, which occurs after the customer has obtained control.

As a result, the Company has made a policy election that permits us to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost rather than as an additional promised service.

For these arrangements, the Company accrues all shipping and handling expenses related to the shipped products in the period that the revenue is recognized.

The Company also sells direct to consumers at Company-operated freestanding stores and online through Company-owned and operated e-commerce sites and through third-party online malls.

At Company-operated freestanding stores, revenue is recognized when control of the product is transferred at the point of sale.

2 unchanged sentences

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 provides gift with purchase promotional products to certain customers generally without additional charge and also provides purchase with purchase promotional products to certain customers at a discount in relation to prices charged for saleable product.

Revenue is allocated between saleable product, gift with purchase product and purchase with purchase product based on the estimated relative standalone selling prices.

Revenue is deferred and ultimately recognized based on the timing differences, if any, between when control of promotional goods and control of the related saleable products transfer to the Company’s customer (e.g., a third-party retailer), which is calculated based on the weighted-average number of days between promotional periods.

The estimated standalone selling price allocated to promotional goods is based on a cost plus margin approach.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

4 unchanged sentences

Revenue is recognized when the benefits are redeemed or expire.

Revenue is allocated between saleable product, gift with purchase product and purchase with purchase product based on the estimated relative standalone selling prices.

The estimated standalone selling price allocated to promotional goods is based on a cost plus margin approach.

In situations where promotional products are provided by the Company to its customers at the same time as the related saleable product, such as shipments of samples and testers, the cost of these promotional products are recognized as a cost of sales at the same time as the related revenue is recognized and no deferral of revenue is required.

The Company also offers gift cards through Company-operated freestanding stores and Company-owned websites.

The related deferred revenue is estimated based on expected breakage that considers historical patterns of redemption taking into consideration escheatment laws as applicable.

Product Returns, Sales Incentives and Other Forms of Variable Consideration

5 unchanged sentences

In addition, the Company recognizes an asset included in Inventory and promotional merchandise and a corresponding adjustment to Cost of sales for the right to recover goods from customers associated with the estimated returns.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The sales return accrual and corresponding asset include estimates that directly impact reported net sales.

9 unchanged sentences

To the extent the Company receives a distinct good or service in exchange for consideration and the fair value of the benefit can be reasonably estimated, the Company’s share of the counter depreciation and the other costs of these transactions (regardless of to whom they were paid) are reflected in Selling, general and administrative expenses in the accompanying consolidated statements of earnings.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

See Note 15 – Revenue Recognition for further discussion .

3 unchanged sentences

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.

Licensing the TOM FORD trademark to customers represents a 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.

5 unchanged sentences

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.

See Note 5 – Asset Acquisition and Note 15 - Revenue Recognition for further information regarding the acquisition of the TOM FORD brand.

Advertising and Promotion

Global net advertising, merchandising, sampling, promotion and product development expenses of $ 3,657 million, $ 3,711 million and $ 3,877 million in fiscal 2024, 2023 and 2022, respectively, are recorded in Selling, general and administrative expenses in the accompanying consolidated statements of earnings and are expensed as incurred.

The cost of certain promotional products, including samples and testers, are classified within Cost of sales.

The cost of certain promotional products, including samples and testers, are classified within Cost of sales in the accompanying consolidated statements of earnings.

Research and Development

Research and development costs of $ 360 million, $ 344 million and $ 307 million in fiscal 2024, 2023 and 2022, 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

2 unchanged sentences

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 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.

The Company's current license arrangements have an initial term of approximately 3 years to 10 years, and are renewable subject to the Company’s compliance with the license agreement provisions.

As of June 30, 2024, the remaining terms considering available renewal periods range from 2 years to approximately 26 years.

2 unchanged sentences

Royalty expenses are accrued in the period in which net sales are recognized while advertising and promotional expenses are accrued at the time these costs are incurred.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, net of estimated forfeitures.

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.

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

The Company calculates and provides for income taxes in each tax jurisdiction in which it operates.

5 unchanged sentences

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.

8 unchanged sentences

Redeemable Noncontrolling Interest

On May 18, 2021, the Company acquired additional shares in Deciem Beauty Group Inc.

( “DECIEM” ), a Toronto-based skin care company.

On May 18, 2021, the Company acquired additional shares in DECIEM , a Toronto-based skin care company.

The Company originally acquired a minority interest in DECIEM in June 2017.

1 unchanged sentence

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”).

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.

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 was classified as mezzanine equity in the accompanying consolidated balance sheets.

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.

Each reporting period, an 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.

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.

as it uses the two-class method when calculating earnings per common share.

The fair value of the noncontrolling interest per share is calculated by incorporating significant assumptions including the starting equity value, revenue growth rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) and the following key assumptions into the Monte Carlo method:

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, an adjustment is recorded in Retained earnings and the Company will adjust Net earnings (loss) attributable to The Estée Lauder Companies Inc.

as required by the two-class method when calculating earnings per common share.

Prior to May 31, 2024, the fair value of the noncontrolling interest per share was calculated by incorporating significant assumptions including the starting equity value, revenue growth rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) and the following key assumptions into the Monte Carlo method:

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

Government Assistance

The Company recognizes amounts received from government assistance programs as a reduction to cost of sales or operating expenses in the consolidated statements of earnings when there is reasonable assurance the Company will receive the amount and has met the conditions, if any, required by the government assistance program.

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 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

The Company has not recorded any adjustments, as described above, since the acquisition of DECIEM.

On May 31, 2024, the Company purchased the remaining interest of approximately 24 % on a fully diluted basis in DECIEM at a contractually calculated amount pursuant to the terms of the net Put (Call) Option, which resulted in the settlement of the redeemable noncontrolling interest and DECIEM stock options for $ 743 million and $ 114 million, respectively.

Transaction costs associated with the purchase were $ 2 million and were recorded as an adjustment to Paid-in capital.

As this purchase did not result in a change in control of DECIEM, the change in ownership interest was accounted for as an equity transaction.

Differences between the balance of the redeemable noncontrolling interest at the date of redemption of the remaining interests and the consideration paid were recognized in Paid-in capital in the accompanying consolidated balance sheets and are not reflected in the accompanying consolidated statements of earnings.

As such, any adjustments in the consideration paid will be recognized in Paid-in capital.

Payments for the acquisition of redeemable noncontrolling interest, inclusive of transaction costs, are classified as financing activities and payments to settle the DECIEM stock option liability are classified within operating activities within the accompanying consolidated statements of cash flows.

As of June 30, 2024, the consideration paid to acquire the remaining interest is subject to the final calculation of the purchase price pursuant to the contract.

See Note 19 – Stock Programs for additional information relating to the DECIEM stock options.

Recently Adopted Accounting Standards

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

4 unchanged sentences

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.

Effective for the Company – The guidance became effective for the Company’s first quarter fiscal 2024 and has been 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.

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

Such information is included below wit hin Note 10 – Supplier Finance Programs .

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

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 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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Impact on consolidated financial statements – The Company completed its comprehensive evaluation of applying this guidance and adopted certain practical expedients for its interest rate swap agreements in the fiscal 2024 first quarter which did not have a significant impact on its consolidated financial statements.

The practical expedients that were 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 were elected, but are now discounted using the Secured Overnight Financing Rate ("SOFR").

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

Recently Issued Accounting Standards

2023-07 – Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued authoritative guidance to improve reportable segment disclosure requirements.

Companies are required to disclose significant segment expenses by reportable segment if they are regularly provided to the chief operating decision maker (CODM).

Companies are also required to disclose other segment items by reportable segment.

The guidance clarifies that companies may disclose more than one measure of segment profit or loss used by the CODM, provided that at least one of the reported measures includes the segment profit or loss measure that is most consistent with U.S.

GAAP measurement principles.

All existing annual disclosures about segment profit or loss, as well as the new requirements, must now be provided on an interim basis.

Additionally, on an annual basis, the CODM’s title and position is required, as well as an explanation of how the CODM uses the reported measure(s) and other disclosures.

The guidance does not change how companies identify their operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

Effective for the Company – The guidance is effective for the Company’s fiscal year ending June 30, 2025 Form 10-K and then in interim periods beginning in the Company’s first quarter of fiscal 2026.

Early adoption is permitted.

The guidance should be applied retrospectively unless impracticable.

Impact on consolidated financial statement s – The Company is currently evaluating the impact that this guidance will have on its financial statement disclosures.

2023-09 – Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

In December 2023, the FASB issued authoritative guidance to amend and enhance existing annual in come tax disclosures primarily focusing on two reporting areas:

(1) greater disaggregation of information in the effective tax rate reconciliations and (2) disclosure of income taxes paid by the companies, disaggregated by applicable jurisdiction.

Companies are required to use specific categories to prepare and disclose a tabular rate reconciliation (using both percentages and reporting currency amounts) of:

• the reported income tax expense (or benefit) from continuing operations and the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal income tax rate of the jurisdiction of domicile.

• reconciling items within certain categories that are equal to or greater than a specified quantitative threshold, including the nature, effect, and underlying causes of the reconciling items and the judgment used in categorizing the reconciling items.

The guidance also requires companies to disclose the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign jurisdictions including individual jurisdictions with amounts paid equal to or greater than a specified quantitative threshold.

The guidance also requires companies to disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign as well as income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign jurisdictions.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Effective for the Company – The guidance is effective for the Company’s fiscal year ending June 30, 2026 Form 10-K.

Early adoption is permitted.

The guidance should be applied on a prospective basis with the option to apply the standard retrospectively.

Impact on consolidated financial statement s – The Company is currently evaluating the impact that this guidance will have on its financial statement disclosures.

SEC Final Rule Release No.

33-11275 – The Enhancement and Standardization of Climate-Related Disclosures for Investors

In March 2024, the SEC adopted rules intended to enhance and standardize climate-related disclosures in registration statements and annual reports.

The rules require significant effects of severe weather events and other natural conditions, amounts related to carbon offsets and renewable energy credits or certificates, as well as material impacts on financial estimates and assumptions that are due to severe weather events and other natural conditions or disclosed climate-related targets or transition plans to be disclosed in the annual financial statements in certain circumstances.

Effective for the Company – On April 4, 2024, the SEC issued an order staying the final rule on climate-related disclosures pending certain legal challenges.

Under the rule as currently issued, the disclosure requirements related to the annual financial statements are expected to be effective for the Company's annual report on Form 10-K for the fiscal year ending June 30, 2026.

The Company is not required to provide comparative information in the year of adoption.

Impact on consolidated financial statement s – The Company is currently evaluating the impact that this guidance will have on its annual financial statement disclosures.

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

6 unchanged sentences

$ 2,175 $ 2,979

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

2 unchanged sentences

Assets (Useful Life)

Land $ 70 $ 53

Land and improvements (1)

Buildings and improvements ( 10 to 40 years)

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$ 3,136 $ 3,179

(1) Land improvements are depreciated over a 10 year useful life.

Depreciation and amortization of property, plant and equipment was $ 663 million, $ 577 million and $ 543 million in fiscal 2024, 2023 and 2022, respectively.

1 unchanged sentence

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 – BUSINESS AND ASSET ACQUISITIONS

Asset Acquisition

NOTE 5 – 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”).

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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).

At the same time as the Company's transaction, an affiliate of Zegna separately purchased the interests in the TOM FORD fashion business that Zegna and its affiliates 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.

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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.

DECIEM is a multi-brand beauty company with a brand portfolio that includes The Ordinary and NIOD.

This acquisition is expected to further strengthen the Company’s leadership position in prestige skin care, expand its global consumer reach and complement its business in the online and specialty-multi channels.

The Company originally acquired a minority interest in DECIEM in June 2017.

The minority interest was accounted for as an equity method investment, which had a carrying value of $ 65 million at the acquisition date.

The acquisition of additional shares increased the Company's fully diluted equity interest from approximately 29 % to approximately 76 % and was considered a step acquisition.

On a fully diluted basis, the DECIEM stock options, discussed below, approximated 4 % of the total capital structure.

Accordingly, for purposes of determining the consideration transferred, the Company excluded the DECIEM stock options, which resulted in an increase in the Company’s post-acquisition undiluted equity interest from approximately 30 % to approximately 78 % and the post-acquisition undiluted equity interest of the remaining noncontrolling interest holders of approximately 22 %.

The Company remeasured the previously held equity method investment to its fair value of $ 913 million, resulting in the recognition of a gain of $ 848 million.

The gain on the Company’s previously held equity method investment is included in Other income, net in the accompanying consolidated statements of earnings for the year ended 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-year period, with a purchase price based on the future performance of DECIEM (the “net Put (Call) Option”).

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:

(In millions) March 31, 2022

Cash paid $ 1,095

Fair value of DECIEM stock options liability 104

Fair value of net Put (Call) Option 233

Total consideration for the acquired ownership interest (approximately 47.9 %)

Fair value of previously held equity method investment (approximately 30.5 %)

Fair value of redeemable noncontrolling interest (approximately 21.6 %)

Total consideration transferred ( 100 %)

As part of the acquisition of additional shares, DECIEM stock options were issued in replacement of and exchange for certain vested and unvested stock options previously issued by DECIEM.

The total fair value of the DECIEM stock options of $ 295 million was recorded as part of the total consideration transferred, comprising of $ 191 million of Cash paid for vested options settled as of the acquisition date and $ 104 million reported as a stock options liability on the Company's consolidated balance sheet as it is not an assumed liability of DECIEM and is expected to be settled in cash upon completion of the exercise of the Put (Call).

The acquisition-date fair value of the DECIEM stock options liability was calculated by multiplying the acquisition-date fair value by the number of DECIEM stock options replaced the day after the acquisition date.

The stock options replaced consist of vested and partially vested stock options.

See Note 18 – Stock Programs for information relating to the DECIEM stock options.

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

The remaining acquisition-date fair value of the redeemable noncontrolling interest of $ 647 million was calculated by multiplying the gross-up of the total consideration for the acquired ownership interest of $ 2,992 million by the related noncontrolling interest of approximately 21.6 %.

The acquisition-date fair values of the DECIEM stock options and the net Put (Call) Option 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:

Risk-free rate 0.50 %

Term to mid of last twelve-month period 2.54 years

Operating leverage adjustment 0.45

Net sales discount rate 3.30 %

EBITDA discount rate 6.80 %

EBITDA volatility 38.30 %

Net sales volatility 17.20 %

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company recorded an allocation of the total consideration transferred to the tangible and identifiable intangible assets acquired and liabilities assumed based on their fair value at the acquisition date.

The total consideration transferred includes the cash paid at closing, the fair value of its previously held equity method investment, the fair value of the redeemable noncontrolling interest, including the fair value of the net Put (Call) Option, and the fair value of the DECIEM stock options liability.

The excess of the total consideration transferred over the fair value of the net tangible and intangible assets acquired was recorded as goodwill.

To determine the acquisition date estimated fair value of intangible assets acquired, the Company applied the income approach, specifically the multi-period excess earnings method for customer relationships and the relief-from-royalty method for trademarks.

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

(In millions) March 31, 2022

Accounts receivable 64

Inventory 190

Other current assets 33

Property, plant and equipment 40

Operating lease right-of-use assets 40

Intangible assets 1,917

Goodwill 1,296

Deferred income taxes 8

Total assets acquired 3,623

Accounts payable 21

Operating lease liabilities 8

Other accrued liabilities 78

Deferred income taxes 479

Long-term operating lease liabilities 45

Total liabilities assumed 631

Total consideration transferred $ 2,992

The results of operations for DECIEM and acquisition-related costs were not material to the Company's consolidated statements of earnings for the year ended June 30, 2021.

Pro forma results of operations reflecting the acquisition of DECIEM are not presented, as the impact on the Company’s consolidated financial results would not have been material.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – GOODWILL AND OTHER INTANGIBLE ASSETS

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.

As such, the goodwill has been allocated to the Company’s skin care product category.

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 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.

Fair value was determined under this approach by estimating future cash flows over multiple periods, as well as a terminal value, and discounting such cash flows at a rate of return that reflects the relative risk of the cash flows.

The estimate of the fair values of the acquired intangible assets not subject to amortization were 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 ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company assigns goodwill of a reporting unit to the product categories in which that reporting unit operates at the time of acquisition.

5 unchanged sentences

1,564 384 220 353 2,521

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

Translation adjustments, goodwill

( 38 ) — 5 — ( 33 )

Translation adjustments, accumulated impairments

( 1 ) — ( 1 ) — ( 2 )

( 39 ) — 4 — ( 35 )

Balance as of June 30, 2023

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1,525 384 224 353 2,486

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

Translation and other adjustments, accumulated impairments ( 1 ) — ( 1 ) — ( 2 )

Impairment charges

( 291 ) — — — ( 291 )

Translation adjustments, goodwill

( 52 ) — ( 1 ) — ( 53 )

Translation adjustments, accumulated impairments

( 342 ) — ( 1 ) — ( 343 )

Balance as of June 30, 2024

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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.

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

Other intangible assets (e.g., customer lists) are amortized on a straight-line basis over their expected period of benefit, approximately 7 years to 18 years.

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 2024 and 2023 were not material to the Company’s results of operations.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As previously discussed in Note 5 - Asset Acquisition , in April 2023, the Company completed the TOM FORD Acquisition and recorded an indefinite-lived 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 most significant unobservable input was the weighted average cost of capital used to discount future cash flows.

Other intangible assets consist of the following:

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Amortizable intangible assets:

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

Customer lists and other $ 1,971 $ 895 $ 1,076 $ 2,030 $ 766 $ 1,264

Non-amortizable intangible assets:

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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 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, 2024, the Company determined that the carrying value of the Dr.Jart+ reporting unit and trademark exceeded their estimated fair values.

Given the lower-than-expected growth within key geographic regions, the reporting unit has made a strategic shift in its operating plan to exit the travel retail channel.

This revised strategy also includes increased direct investment in other areas of the business, including in China, to support the brand’s future growth.

As a result of these changes in strategy, the Company made revisions to the internal forecasts relating to the Dr.Jart+ reporting unit which were finalized and approved in the fiscal 2024 fourth quarter, and reflected in the goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2024.

These changes in circumstances were also indicators that the carrying amounts of its respective long-lived assets may not be recoverable.

The Company concluded that the carrying value of the trademark intangible asset exceeded its estimated fair value, which was determined utilizing the relief-from-royalty method to determine discounted projected future cash flows and recorded an impairment charge of $ 180 million.

The Company then performed a recoverability analysis of the Dr.Jart+ long-lived asset group and, based on the estimated undiscounted cash flows of the asset group, concluded that the carrying amount of the long-lived assets were recoverable.

After adjusting the carrying value of the trademark, the Company completed a quantitative impairment test for goodwill.

As the carrying value of the reporting unit exceeded its estimated fair value, the Company recorded a goodwill impairment charge of $ 291 million.

The estimated fair value of the 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 significant assumptions used in these approaches include revenue growth rates and profit margins, terminal value, weighted average cost of capital used to discount future cash flows, comparable market multiples for the reporting unit, and royalty rate for the trademark.

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

A summary of the impairment charges for the twelve months ended June 30, 2024 and the remaining trademark and goodwill carrying values as of June 30, 2024 are as follows:

Impairment Charges (1)

Carrying Value

(In millions)

Twelve Months Ended

June 30, 2024

As of June 30, 2024

Reporting Unit

Geographic Region

Trademark (2)

$ 180 $ 291 $ 129 $ —

(1) The date of the fair value measurement for the Dr.Jart+ reporting unit and trademark intangible asset was April 1, 2024.

(2) The carrying value of the trademark intangible asset, subsequent to the impairment charge, is equal to its fair value.

The impairment charges for the twelve months ended June 30, 2024 were reflected in the skin care product category.

Fiscal 2023 Impairment Analysis

During the fiscal 2023 second quarter, given the lower-than-expected results in the overall business, the Company made revisions to 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.

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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.

As a result, the Company made revisions to 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.

9 unchanged sentences

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

Impairment Charges (1)

Carrying Value

(In millions) Twelve Months Ended

June 30, 2023 As of June 30, 2023

Reporting Unit Geographic Region Trademarks Goodwill Trademarks Goodwill

Reporting Unit Geographic Region Trademarks Goodwill Trademarks (2)

Smashbox The Americas $ 21 $ — $ — $ —

2 unchanged sentences

Total $ 207 $ — $ 511 $ 317

(1) The date of the fair value measurement for the Smashbox, Dr.Jart+, and Too Faced trademark intangible assets was December 31, 2022, November 30, 2022, and November 30, 2022, respectively.

(2) The carrying values of the trademark intangible assets, subsequent to the impairment charges, are equal to their fair values.

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.

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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 Charges Carrying Value

(In millions) Impairment Charges (1)

Carrying Value (2)

Reporting Unit:

3 unchanged sentences

Total $ 25 $ 241 $ 428

(1) The date of the fair value measurement for the GLAMGLOW trademark intangible asset was March 31, 2022.

The dates of the fair value measurements for the Dr.Jart+ trademark intangible asset were February 28, 2022 and April 1, 2022.

(2) The carrying values of the trademark intangible assets, subsequent to the impairment charges, are equal to their fair values.

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

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.

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

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

Accordingly, the Company performed an interim impairment test for the trademark and a recoverability test for the long-lived assets as of November 30, 2020.

The Company concluded that the carrying value of the trademark for GLAMGLOW exceeded its estimated fair value, which was determined utilizing the relief-from-royalty method to determine discounted projected future cash flows, and recorded an impairment charge of $ 21 million.

In addition, the Company concluded that the carrying value of the GLAMGLOW customer lists intangible asset was fully impaired and recorded an impairment charge of $ 6 million.

The fair value of all other long-lived assets of GLAMGLOW exceeded their carrying values and were not impaired as of November 30, 2020.

After adjusting the carrying values of the trademark and customer lists intangible assets, the Company completed an interim quantitative impairment test for goodwill and recorded a goodwill impairment charge of $ 54 million, reducing the carrying value of goodwill for the GLAMGLOW reporting unit to zero .

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.

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.

This determination was made based on updated internal forecasts, finalized and approved in June 2021, that reflected lower net sales growth projections due to a softer than expected retail environment for these brands, as well as the continued impacts relating to the uncertainty of the duration and severity of the COVID-19 pandemic.

These changes in circumstances were also indicators that the carrying amounts of their respective long-lived assets may not be recoverable.

The Company concluded that the carrying values of the trademarks 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.

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

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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 Charges

(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.

NOTE 7 – LEASES

For further information on the Company's policies relating to leases see Note 2 – Summary of Significant Accounting Policies.

The Company has operating and finance leases primarily for real estate properties, including corporate offices, facilities to support the Company’s manufacturing, assembly, research and development and distribution operations and retail stores, as well as information technology equipment, automobiles and office equipment, with remaining terms of approximately 1 year to 56 years.

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:

46 unchanged sentences

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, 2024 and 2023.

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.

Accordingly, the Company performed a recoverability test by comparing projected undiscounted cash flows from the use and eventual disposition of an asset or asset group to its carrying value.

For those freestanding stores that failed step one of this test, the Company then compared the assets carrying values to their estimated fair values.

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 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 ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of impairment charges is as follows:

(In millions) Year Ended June 30, 2021

Product Category Impairment Charge

Skin care $ 1

The Americas $ 23

Europe, the Middle East & Africa 48

Asia/Pacific —

NOTE 8 – CHARGES ASSOCIATED WITH RESTRUCTURING AND OTHER ACTIVITIES

During fiscal 2023, the Company incurred charges associated with the Post-COVID Business Acceleration Program restructuring activities as follows:

During fiscal 2024, the Company incurred charges associated with restructuring activities as follows:

Net Sales) Cost of Sales Operating Expenses Total

1 unchanged sentence

Charges Other

Restructuring Program Component of the Profit Recovery and Growth Plan

$ — $ — $ 92 $ 23 $ 115

Post-COVID Business Acceleration Program 1 1 1 7 10

Total $ 1 $ 1 $ 93 $ 30 $ 125

The types of activities included in restructuring and other charges, and the related accounting criteria, are described below.

Charges associated with restructuring and other activities are not allocated to the Company's product categories or geographic regions because they are centrally directed and controlled, are not included in internal measures of product category or geographic region performance and result from activities that are deemed Company-wide initiatives to redesign, resize and reorganize select areas of the business.

Restructuring Program Component of the Profit Recovery and Growth Plan ("Restructuring Program")

As announced on November 1, 2023, the Company launched a Profit Recovery Plan, now known as the Profit Recovery and Growth Plan ("PRGP"), to help progressively rebuild its profit margins in fiscal years 2025 and 2026.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The PRGP is focused on rebuilding stronger, more sustainable profitability, supporting sales growth acceleration and increasing speed and agility.

The plan is designed to improve gross margin, lower the cost base and reduce overhead expenses, while increasing investments in key consumer-facing activities.

Upon completion of this plan, the Company expects to have improved its gross margin and expense base to drive greater operating leverage for the future.

As a component of the PRGP, on February 5, 2024, the Company announced a two-year restructuring program.

The restructuring program’s main focus includes the reorganization and rightsizing of certain areas of the Company as well as simplification and acceleration of processes.

The Company committed to this course of action on February 1, 2024.

In connection with the restructuring program, as of June 30, 2024, the Company estimates a net reduction in the range of approximately 1,800 to 3,000 positions globally, which is about 3 - 5 % of its positions including temporary and part-time employees as of June 30, 2023.

This reduction takes into account the elimination of some positions as well as retraining and redeployment of certain employees in select areas.

The Company plans to substantially complete specific initiatives under the restructuring program through fiscal 2026.

The Company expects that the restructuring program will result in restructuring and other charges totaling between $ 500 million and $ 700 million, before taxes, consisting of employee-related costs, contract terminations, asset write-offs and other costs associated with implementing these initiatives.

Restructuring Program Approvals

The Restructuring Program cumulative charges approved by the Company as of June 30, 2024 and through July 19, 2024, as previously disclosed on July 23, 2024, were:

Net Sales) Cost of Sales Operating Expenses Total

(In millions) Restructuring

Charges Other

Total Charges Approved

Cumulative charges through June 30, 2024

$ — $ — $ 109 $ 78 $ 187

July 1, 2024 - July 19, 2024

Cumulative charges through July 19, 2024

$ 1 $ 9 $ 133 $ 90 $ 233

Included in the above table, cumulative Restructuring Program restructuring initiatives approved by the Company as of June 30, 2024 and through July 19, 2024, as previously disclosed on July 23, 2024, by major cost type were:

(In millions) Employee-

Costs Contract

Terminations Other Exit

Restructuring Charges Approved

Cumulative charges through June 30, 2024

$ 93 $ 7 $ — $ 9 $ 109

July 1, 2024 - July 19, 2024

Cumulative charges through July 19, 2024

$ 116 $ 7 $ — $ 10 $ 133

Specific actions taken since the Restructuring Program inception through July 19, 2024, to reorganize and right-size certain areas of the Company to drive future sales growth and productivity to rebuild gross and operating margin profitability include:

• Value Chain Optimization – The Company approved initiatives to reduce spans and layers and right-size organizational capability within its supply chain.

These actions will primarily result in employee severance through a net reduction in workforce, as well as costs to decommission and relocate activities, and asset write-offs.

• Enabling Function Re-Invention - The Company approved initiatives to reorganize and right-size its go-to market structure, including across various corporate functions.

These activities will primarily result in employee severance through a net reduction in workforce.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• Future of Brand-led Model – The Company approved initiatives to focus on spans and layers to begin to develop a leaner, faster, and more agile marketing and creative organization.

These activities will primarily result in employee severance through a net reduction in workforce.

• Go-to-Market Operating Model Acceleration – The Company approved initiatives to exit unprofitable brands from specific markets and distribution channels.

These activities will result in inventory write-offs, employee severance through a net reduction in workforce, as well as costs associated with sales returns.

Restructuring Program Restructuring and Other Charges

The Company classifies restructuring charges as follows:

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 (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.

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.

Other Exit Costs – Other exit costs related to restructuring activities generally include costs to relocate facilities or employees, recruiting to fill positions as a result of relocation of operations, and outplacement for separated employees.

The Company classifies other charges associated with restructuring activities as follows:

Sales Returns and Cost of Sales – Product returns (offset by the related cost of sales) and inventory write-offs or write-downs as a direct result of an approved restructuring initiative to exit certain businesses or locations will be recorded as a component of Net sales and/or Cost of sales when estimable and reasonably assured.

Other Charges – Other charges related to the design and implementation of approved initiatives, which are charged to Operating expenses as incurred and primarily include the following:

• Consulting and other professional services for organizational design of the future structures and processes as well as the implementation thereof;

• Temporary labor backfill;

• Costs to establish and maintain a Project Management Office for the duration of the Restructuring Program, including internal costs for employees dedicated solely to project management activities, and consulting services to assist with business case development;

• Recruitment and training costs for new and reskilled employees to acquire and apply the capabilities needed to perform responsibilities as a direct result of an approved restructuring initiative.

The Company records approved charges associated with restructuring and other activities once the relevant accounting criteria have been met.

Total cumulative charges recorded associated with restructuring and other activities for the Restructuring Program through June 30, 2024 were:

Net Sales) Cost of Sales Operating Expenses Total

(In millions) Restructuring

Charges Other

Total Charges

Cumulative charges through June 30, 2024

$ — $ — $ 92 $ 23 $ 115

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions) Employee-

Costs Contract

Terminations Other Exit

Restructuring Charges

Cumulative charges through June 30, 2024

$ 90 $ 2 $ — $ — $ 92

Changes in accrued restructuring charges from the Restructuring Program inception through June 30, 2024 were:

(In millions) Employee-

Costs Contract

Terminations Other Exit

Charges $ 90 $ 2 $ — $ — $ 92

Cash payments — — — — —

Non-cash asset write-offs

— ( 2 ) — — ( 2 )

Translation and other adjustments

( 2 ) — — — ( 2 )

Balance at June 30, 2024

$ 88 $ — $ — $ — $ 88

Accrued restructuring charges at June 30, 2024 relating to the Restructuring Program are expected to result in cash expenditures funded from cash provided by operations of approximately $ 59 million, $ 24 million, and $ 5 million for fiscal 2025, 2026, and 2027, respectively.

Post-COVID Business Acceleration Program

On August 20, 2020, the Company announced a two-year restructuring program, Post-COVID Business Acceleration Program (the “PCBA Program”), designed to realign the Company's business to address the dramatic shifts to its distribution landscape and consumer behaviors in the wake of the COVID-19 pandemic.

The PCBA Program is designed to help improve efficiency and effectiveness by rebalancing resources to growth areas of prestige beauty.

It is expected to further strengthen the Company by building upon the foundational capabilities in which the Company has invested.

The PCBA Program’s main areas of focus include accelerating the shift to online with the realignment of the Company’s distribution network reflecting freestanding store and certain department store closures, with a focus on North America and Europe, the Middle East & Africa;

The PCBA Program’s main areas of focus included accelerating the shift to online with the realignment of the Company’s distribution network reflecting freestanding store and certain department store closures, with a focus on North America and Europe, the Middle East & Africa;

the reduction in brick-and-mortar point of sale employees and related support staff;

and the redesign of the Company’s regional branded marketing organizations, plus select opportunities in global brands and functions.

This program is expected to position the Company to better execute its long-term strategy while strengthening its financial flexibility.

As of June 30, 2024, the net reduction of positions over the duration of the PCBA Program was approximately 2,800 positions globally.

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

As of June 30, 2024, over the duration of the PCBA program, the Company closed approximately 16 % of its freestanding stores.

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

Inclusive of approvals from inception through June 30, 2022, as of June 30, 2024, that the PCBA Program resulted in related restructuring and other charges totaling approximately $ 435 million, before taxes.

Specific actions taken during the PCBA Program 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 initiatives 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 reduced its corporate and certain of its brand office footprints, by restructuring where and how its employees work and collaborate.

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

These actions 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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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 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 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 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.

• 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 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 closures reflected changing consumer behaviors including higher demand for online and omnichannel capabilities.

These activities 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.

These activities resulted in charges for the impairment of goodwill and other intangible assets, product returns, termination of contracts, and employee severance.

The Company completed these initiatives during fiscal 2022.

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

• 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 renew its license agreements for the Donna Karan New York, DKNY, Michael Kors, Tommy Hilfiger and Ermenegildo Zegna product lines when their respective terms expired in June 2023.

The Company negotiated early termination agreements with each of the licensors effective June 30, 2022.

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

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

PCBA Program Restructuring and Other Charges

Restructuring charges are comprised of the following:

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Other charges associated with restructuring activities are comprised of the following:

Other Charges – The Company approved other charges related to the design and implementation of approved initiatives, which are charged to Operating expenses as incurred and primarily include the following:

• Consulting and other professional services for organizational design of the future structures and processes as well as the implementation thereof;

• Temporary labor backfill;

• Costs to establish and maintain a PMO for the duration of the PCBA Program, including internal costs for employees dedicated solely to project management activities, and other PMO-related expenses incremental to the Company’s ongoing operations (e.g., rent and utilities);

• Recruitment and training costs for new and reskilled employees to acquire and apply the capabilities needed to perform responsibilities as a direct result of an approved restructuring initiative.

For the classification of the restructuring and other charges for the PCBA program, please refer to the Restructuring Program Component of the Profit Recovery and Growth Plan above.

The Company records approved charges associated with restructuring and other activities once the relevant accounting criteria have been met.

4 unchanged sentences

Total Charges

Fiscal 2021 $ 14 $ 2 $ 201 $ 4 $ 221

Fiscal 2022 4 5 109 9 127

Fiscal 2023 27 3 35 12 77

$ 14 $ 2 $ 201 $ 4 $ 221

4 5 109 9 127

27 3 35 12 77

Cumulative through June 30, 2024 $ 46 $ 11 $ 346 $ 32 $ 435

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions) Employee-

1 unchanged sentence

Restructuring Charges (Adjustments)

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

Fiscal 2022 84 11 13 1 109

Fiscal 2023 3 31 ( 2 ) 3 35

$ 119 $ 75 $ 6 $ 1 $ 201

84 11 13 1 $ 109

3 31 ( 2 ) 3 35

( 4 ) 4 1 — 1

Cumulative through June 30, 2024 $ 202 $ 121 $ 18 $ 5 $ 346

(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.

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in accrued restructuring charges from the PCBA Program inception through June 30, 2024 were:

(In millions) Employee-

4 unchanged sentences

Non-cash asset write-offs

— ( 75 ) — — ( 75 )

Balance at June 30, 2021

101 — — — 101

Charges 84 $ 11 $ 13 1 109

1 unchanged sentence

Non-cash asset write-offs

— ( 11 ) ( 11 )

Translation and other adjustments

( 8 ) — $ — ( 2 ) ( 10 )

Balance at June 30, 2022

125 — — — 125

Charges 3 31 ( 2 ) $ 3 35

3 unchanged sentences

Balance at June 30, 2023

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.

Charges ( 4 ) 4 1 — 1

Cash payments ( 49 ) — ( 1 ) — ( 50 )

Non-cash asset write-offs — ( 4 ) — — ( 4 )

Translation and other adjustments — — ( 1 ) — ( 1 )

Balance at June 30, 2024 $ 28 $ — $ — $ — $ 28

Accrued restructuring charges at June 30, 2024 relating to the PCBA Program are expected to result in cash expenditures funded from cash provided by operations of approximately $ 25 million and $ 3 million for each of fiscal 2025 and 2026, respectively.

THE ESTÉE LAUDER COMPANIES INC.

15 unchanged sentences

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.

federal government enacted the Inflation Reduction Act, including a tax provision implementing a 15% corporate alternative minimum tax based on global adjusted financial statement income.

The corporate alternative minimum tax became effective beginning with the Company's first quarter of fiscal 2024 and did not have an impact on the Company's consolidated financial statements for the year-ended June 30, 2024.

On July 20, 2020, the U.S.

11 unchanged sentences

State and local income taxes, net of federal tax benefit 1.1 0.3 0.7

Stock-based compensation arrangements – excess tax benefits, net ( 0.8 ) ( 2.7 ) ( 3.0 )

Previously held equity method investment gain - DECIEM (1)

GILTI - High-Tax Exception election (adjustment for prior years) — — ( 1.4 )

Stock-based compensation arrangements – excess tax expense (benefits), net

3.0 ( 0.8 ) ( 2.7 )

Taxation of foreign operations 15.9 8.6 1.4

1 unchanged sentence

Nondeductible goodwill impairment charges 7.9 — —

research and development tax credit

( 2.2 ) ( 0.9 ) ( 0.3 )

Other, net 0.7 ( 0.4 ) 0.3

1 unchanged sentence

47.0 % 27.7 % 20.7 %

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

(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.

(1) For fiscal 2024 and 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 2023 to fiscal 2024 and from fiscal 2022 to fiscal 2023, respectively.

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 $ 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.

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

The Company recognized $ 23 million of income tax expense associated with stock-based compensation for the fiscal year ended June 30, 2024, as compared to $ 11 million and $ 82 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 and 2022, respectively.

The Company has $ 5,038 million of undistributed earnings of foreign subsidiaries as of June 30, 2024.

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

Included in this amount is approximately $ 1,000 million of earnings considered permanently reinvested 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 $ 70 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.

26 unchanged sentences

As of June 30, 2024 and 2023, certain subsidiaries had $ 657 million and $ 528 million of foreign net operating loss carryforwards, respectively, the tax effect of which was $ 170 million and $ 143 million, respectively, as well as U.S.

federal tax credit carryforwards of $ 79 million and $ 56 million, respectively.

federal tax credit carryforwards of $ 180 million and $ 79 million, respectively, and state and local tax credit carryforwards of $ 8 million.

With the exception of $ 447 million of net operating losses with an indefinite carryforward period as of June 30, 2024, these net operating loss carryforwards expire at various dates through fiscal 2037.

24 unchanged sentences

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.

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

Subsequent to June 30, 2024, the IRS completed its examination procedures with respect to fiscal 2023 under the IRS CAP.

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

4 unchanged sentences

During fiscal 2024, the Company concluded various state, local and foreign income tax audits and examinations while several other matters, including those noted above, were initiated or remained pending.

On the basis of the information available in this regard as of June 30, 2023, the Company does not expect significant changes to the total amount of unrecognized tax benefits within the next twelve months.

On the basis of the information available as of June 30, 2024, the Company does not expect significant changes to the total amount of unrecognized tax benefits within the next twelve months.

THE ESTÉE LAUDER COMPANIES INC.

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The Company believes that its tax reserves are adequate for all years subject to examination.

NOTE 10 – SUPPLIER FINANCE PROGRAMS

Under the Company's supplier finance programs, the Company agrees to pay the banks the stated amount of confirmed invoices from its designated suppliers on the due dates of the invoices.

The Company may terminate the agreements upon written notice (with notice periods ranging from 30 to 60 days) or immediately upon a breach.

The supplier invoices that have been confirmed as valid under the programs require payment in full within 90 days of the invoice date.

Outstanding obligations confirmed as valid totaling $ 58 million and $ 52 million as of June 30, 2024 and 2023, respectively, are included in Accounts payable in the accompanying consolidated balance sheets.

NOTE 11 – OTHER ACCRUED AND NONCURRENT LIABILITIES

4 unchanged sentences

Deferred revenue 327 323

Payroll and other non-income taxes 333 297

Accrued income taxes 335 222

Other 1,407 1,507

$ 3,404 $ 3,216

At June 30, 2023 and 2022, total Other noncurrent liabilities of $ 1,943 million and $ 1,651 million included $ 620 million and $ 692 million of deferred tax liabilities, respectively.

THE ESTÉE LAUDER COMPANIES INC.

12 unchanged sentences

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

5.000 % Senior Notes, due February 14, 2034 ("2034 Senior Notes)

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

6 unchanged sentences

2.000 % Senior Notes, due December 1, 2024 (“2024 Senior Notes”)

2.350 % Senior Notes, due August 15, 2022 (“2022 Senior Notes”)

Commercial paper (1)

6 unchanged sentences

$ 7,267 $ 7,117

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

(1) As of June 30, 2023, commercial paper consisted of $ 1,000 million principal and unamortized debt discount of $ 12 million.

THE ESTÉE LAUDER COMPANIES INC.

18 unchanged sentences

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

2034 Senior Notes (5)

February 2024 99.689 5.040 650 ( 2 ) — ( 4 ) February 14/August 14

October 2033 Senior Notes (6)

12 unchanged sentences

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

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

(2) 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 %.

8 unchanged sentences

As a result of the forward-starting interest rate swap agreements, the debt discount and debt issuance costs, the effective interest rate on the 2037 Senior Notes will be 6.181 % over the life of the debt.

(5) In March 2022, in anticipation of the issuance of the 2034 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $ 300 million at a weighted average all-in rate of 2.02 %.

The treasury lock agreements were terminated in September 2022, and the Company recognized a gain in OCI of $ 31 million that is being amortized to interest expense over the life of the 2034 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 2034 Senior Notes will be 4.53 % over the life of the debt.

(6) In May 2003, in anticipation of the issuance of the 2033 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $ 195 million at a weighted-average all-in rate of 4.53 %.

1 unchanged sentence

As a result of the treasury lock agreements, the debt discount and debt issuance costs, the effective interest rate on the 2033 Senior Notes will be 5.395 % over the life of the debt.

(7) 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.

(8) In March 2020, in anticipation of the issuance of the 2031 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $ 200 million at a weighted-average all-in rate of 0.84 %.

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 2031 Senior Notes will be 1.89 % over the life of the debt.

(6) In November 2016, in anticipation of the issuance of the 2027 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $ 450 million at a weighted-average all-in rate of 2.37 %.

The treasury lock agreements were settled upon the issuance of the new debt, and the Company recognized a gain in OCI of $ 2 million that is being amortized against interest expense over the life of the 2027 Senior Notes.

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 $ 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.

(9) 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 fallback rate SOFR plus a margin.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(10) 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.

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 %.

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.

(11) In November 2016, in anticipation of the issuance of the 2027 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $ 450 million at a weighted-average all-in rate of 2.37 %.

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.

In June 2024, the Company replaced its $ 2,500 million senior unsecured revolving credit facility that was set to expire in October 2026 with a new $ 2,500 million senior unsecured revolving credit facility (the “2024 Facility”).

The 2024 Facility expires on June 7, 2029 unless extended for up to two additional years in accordance with the terms set forth in the agreement.

Up to the equivalent of $ 750 million of the 2024 Facility is available for multi-currency loans.

Interest rates on borrowings under the 2024 Facility will be based on prevailing market interest rates in accordance with the agreement.

The costs incurred to establish the 2024 Facility were not material.

The 2024 Facility has an annual fee of approximately $ 1 million, payable quarterly, based on the Company’s current credit ratings.

The 2024 Facility contains a cross-default provision whereby a failure to pay other material financial obligations in excess of $ 175 million (after grace periods and absent a waiver from the lenders) would result in an event of default and the acceleration of the maturity of any outstanding debt under this facility.

The 2024 Facility may be increased, at the election of the Company, by up to $ 500 million in accordance with the terms set forth in the agreement.

At June 30, 2024, no borrowings were outstanding under the 2024 Facility.

In February 2024, the Company completed a public offering of $ 650 million aggregate principal amount of its 2034 Senior Notes.

The Company used the proceeds from this offering for general corporate purposes, including funding a portion of the price to purchase the remaining interest in DECIEM, operating expenses, working capital, capital expenditures and redemptions and repayment of short-term or long-term borrowings, including 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 defined below).

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”).

The New Facility expires on October 22, 2026 unless extended for up to two additional years in accordance with the terms set forth in the agreement.

Up to the equivalent of $ 750 million of the New Facility is available for multi-currency loans.

Interest rates on borrowings under the New Facility will be based on prevailing market interest rates in accordance with the agreement.

The costs incurred to establish the New Facility were not material.

The New Facility has an annual fee of approximately $ 1 million, payable quarterly, based on the Company’s current credit ratings.

The New Facility contains a cross-default provision whereby a failure to pay other material financial obligations in excess of $ 175 million (after grace periods and absent a waiver from the lenders) would result in an event of default and the acceleration of the maturity of any outstanding debt under this facility.

The New Facility may be increased, at the election of the Company, by up to $ 500 million in accordance with the terms set forth in the agreement.

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

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

Interest rate terms for these facilities vary by region and reflect prevailing market rates for companies with strong credit ratings.

During fiscal 2023 and 2022, the average amount outstanding was approximately $ 1 million and $ 8 million, respectively, and the annualized weighted-average interest rate incurred was approximately 5.4 % and 10.2 %, respectively.

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.

During fiscal 2024 there were no amounts outstanding and in fiscal 2023, the average amount outstanding was approximately $ 1 million, and the annualized weighted-average interest rate incurred was approximately 5.4 %.

Refer to Note 17 – Commitments and Contingencies for the Company’s projected debt service payments as of June 30, 2024 and over the next five fiscal years.

THE ESTÉE LAUDER COMPANIES INC.

2 unchanged sentences

The Company addresses certain financial exposures through a controlled program of risk management that includes the use of derivative financial instruments.

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.

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 enters into the net investment hedges to offset the risk of changes in the U.S.

dollar value of the Company’s investment in these foreign operations due to fluctuating foreign exchange rates.

Time value is excluded from the effectiveness assessment and is recognized under a systematic and rational method over the life of the hedging instrument in Selling, general and administrative expenses.

The net gain or loss on net investment hedges is recorded within translation adjustments, as a component of AOCI on the Company’s consolidated balance sheets, until the sale or substantially complete liquidation of the underlying assets of the Company’s investment.

The Company also enters into foreign currency forward contracts, and may use option contracts, not designated as hedging instruments, to mitigate the change in fair value of specific assets and liabilities on the consolidated balance sheets.

At June 30, 2023, the notional amount of derivatives not designated as hedging instruments was $ 3,667 million.

The Company does not utilize derivative financial instruments for trading or speculative purposes.

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

This process includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions.

At June 30, 2024, the notional amount of derivatives not designated as hedging instruments was $ 4,576 million.

Fair Value Hedges

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

At June 30, 2024, 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 the three-month fallback rate SOFR 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 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, 2024, 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, 2024 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 $ 7 million and $ 20 million as of June 30, 2024 and 2023, respectively.

Cash Flow Hedges

The Company enters into foreign currency forward contracts, and may enter into foreign currency option contracts, to hedge anticipated transactions and receivables and payables denominated in foreign currencies, for periods consistent with the Company’s identified exposures.

The purpose of the hedging activities is to minimize the effect of foreign exchange rate movements on the cash flows that the Company receives from foreign subsidiaries.

The foreign currency forward contracts entered into to hedge anticipated transactions have been designated as cash flow hedges and have varying maturities through the end of March 2026.

Hedge effectiveness of the foreign currency forward contracts is based on the forward method, which includes time value in the effectiveness assessment.

At June 30, 2024, the Company had cash flow hedges outstanding with a notional amount totaling $ 2,300 million.

The Company may enter into interest rate forward contracts to hedge anticipated issuance of debt for periods consistent with the Company’s identified exposures.

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

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, 2024, the Company’s foreign currency cash flow hedges were highly effective.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The estimated net gain on the Company’s derivative instruments designated as cash flow hedges as of June 30, 2024 that is expected to be reclassified from AOCI into earnings, net of tax, within the next twelve months is $ 27 million.

The accumulated net gain on derivative instruments designated as cash flow hedges in AOCI was $ 75 million and $ 79 million as of June 30, 2024 and 2023, respectively.

Net Investment Hedges

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

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 March 2025.

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

At June 30, 2024, the Company had net investment hedges outstanding with a notional amount totaling $ 912 million.

As a matter of policy, the Company enters into derivative contracts only with counterparties that have a long-term credit rating of at least A- or higher by at least two nationally recognized rating agencies.

The counterparties to these contracts are major financial institutions.

Exposure to credit risk in the event of nonperformance by any of the counterparties is limited to the gross fair value of contracts in asset positions, which totaled $ 148 million at June 30, 2024.

To manage this risk, the Company has strict counterparty credit guidelines that are continually monitored.

Accordingly, management believes risk of loss under these hedging contracts is remote.

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

7 unchanged sentences

Derivatives Designated as Hedging Instruments:

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 — —

Foreign currency cash flow hedges (2)

Prepaid expenses and other current assets;

$ 34 $ 56 Other accrued liabilities $ 4 $ 16

Cross-currency swap contracts (3)

Prepaid expenses and other current assets;

Net investment hedges Prepaid expenses and other current assets 15 — Other accrued liabilities — 13

Interest rate-related derivatives Prepaid expenses and other current assets — 24 Other accrued liabilities 150 115

Interest rate-related derivatives — — Other accrued liabilities 145 150

Total Derivatives Designated as Hedging Instruments 129 78 149 179

3 unchanged sentences

(1) See Note 14 – Fair Value Measurements for further information about how the fair value of derivative assets and liabilities are determined.

(2) Included in the asset derivatives for the foreign currency cash flow hedges at June 30, 2024 is approximately $ 2 million, classified within Other assets in the accompanying consolidated balance sheets.

(3) Included in the asset derivatives for the cross-currency swap contracts at June 30, 2024 is approximately $ 70 million, classified within Other assets in the accompanying consolidated balance sheets.

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:

10 unchanged sentences

Foreign currency forward contracts (3)

( 35 ) 175 — —

Total derivatives $ 48 $ 24 $ 50 $ 70

(1) The amount reclassified into earnings as a result of the discontinuance of cash flow hedges because probable forecasted transactions will no longer occur by the end of the original time period was not material.

(1) The amount reclassified into earnings as a result of the discontinuance of cash flow hedges because it is probable that forecasted transactions will not occur by the end of the original time period was not material.

(2) During fiscal 2024 and 2023 the gain recognized in earnings from net investment hedges related to the amount excluded from effectiveness testing was $ 17 million and $ 26 million, respectively.

(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

8 unchanged sentences

(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.

The gain recognized in earnings from cross-currency swap contracts related to the amount excluded from effectiveness testing in fiscal 2024 and 2023 was $ 19 million and $ 9 million, respectively.

(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 gain (loss) recognized in earnings for items designated and qualifying as hedged items in fair value hedges is as follows:

7 unchanged sentences

Intercompany debt $ — $ 87

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:

13 unchanged sentences

N/A (Not applicable)

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions) 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 $ 17,737 $ 9,888 $ 167

The effects of fair value and cash flow hedging relationships:

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

Hedged item N/A N/A 130

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

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

Hedged item N/A — N/A

Derivatives designated as hedging instruments 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 )

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

Amount of gain reclassified from AOCI into earnings 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:

9 unchanged sentences

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.

however, the Company records the fair value on a gross basis on 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:

5 unchanged sentences

Total $ ( 18 ) $ — $ ( 18 ) $ ( 101 ) $ — $ ( 101 )

Cash Flow Hedges

The purpose of the hedging activities is to minimize the effect of foreign exchange rate movements on the cash flows that the Company receives from foreign subsidiaries.

The foreign currency forward contracts entered into to hedge anticipated transactions have been designated as cash flow hedges and have varying maturities through the end of March 2025.

Hedge effectiveness of the foreign currency forward contracts is based on the forward method, which includes time value in the effectiveness assessment.

At June 30, 2023, the Company had cash flow hedges outstanding with a notional amount totaling $ 1,981 million.

The Company may enter into interest rate forward contracts to hedge anticipated issuance of debt for periods consistent with the Company’s identified exposures.

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

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 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.

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.

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.

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

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

The net gain or loss on these contracts is recorded within translation adjustments, as a component of AOCI on the Company’s consolidated balance sheets.

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 November 2023.

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

At June 30, 2023, the Company had net investment hedges outstanding with a notional amount totaling $ 1,082 million.

The counterparties to these contracts are major financial institutions.

Exposure to credit risk in the event of nonperformance by any of the counterparties is limited to the gross fair value of contracts in asset positions, which totaled $ 98 million at June 30, 2023.

To manage this risk, the Company has strict counterparty credit guidelines that are continually monitored.

Accordingly, management believes risk of loss under these hedging contracts is remote.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 – FAIR VALUE MEASUREMENTS

9 unchanged sentences

The inputs are unobservable in the market and significant to the instrument’s valuation.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024:

6 unchanged sentences

Interest rate-related derivatives — 145 — 145

DECIEM stock options — — 99 99

Total $ — $ 166 $ — $ 166

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2023:

2 unchanged sentences

Foreign currency forward contracts — 76 — 76

Interest rate-related derivatives — 24 — 24

Cross-currency swap contracts

Total $ 3,241 $ 98 $ — $ 3,339

3 unchanged sentences

Total $ — $ 199 $ 99 $ 298

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The estimated fair values of the Company’s financial instruments are as follows:

6 unchanged sentences

Deferred consideration payable 341 340 341 338

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

Cross-currency swap contracts - asset

Foreign currency forward contracts – asset, net 47 47 27 27

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)

Other intangible assets, net (trademarks)

GLAMGLOW $ 11 March 31, 2022 $ —

Dr.Jart+ 230 February 28, 2022

April 1, 2022 428

Total $ 241 $ 428

(In millions) Impairment

Charges Date of Fair Value

Measurement Fair Value (1)

GLAMGLOW $ 54 November 30, 2020 $ —

13 February 28, 2021 —

Other 4 June 30, 2021 —

Other intangible assets, net (trademark and customer lists)

GLAMGLOW 52 November 30, 2020

April 1, 2021 11

34 February 28, 2021 —

Smashbox 11 April 1, 2021 21

Long-lived assets 71 March 31, 2021

June 30, 2021 66

Total $ 239 $ 98

(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.

Interest rate-related derivatives – liability

( 145 ) ( 145 ) ( 150 ) ( 150 )

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

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

To determine the fair value of contracts under the model, the difference between the contract price and the current forward rate was discounted using SOFR forward curves.

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.

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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.

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

The significant observable inputs to the model, such as treasury yield curves, swap yield curves and SOFR forward curves, were obtained from independent pricing services.

Current and long-term debt – The fair value of the Company’s debt was estimated based on the current rates offered to the Company for debt with the same remaining maturities.

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

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

Deferred consideration payable – The deferred consideration payable 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 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.

Changes to the discount rates or volatilities would have a lesser effect.

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

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In connection with the purchase of the remaining interest in DECIEM, all DECIEM stock options were exercised in the fiscal 2024 fourth quarter, resulting in the settlement of the stock option liability reducing the balance to zero as of June 30, 2024.

See Note 19 – Stock Programs for discussion .

Changes in the DECIEM stock option liability for the year ended June 30, 2024 are included in Selling, general and administrative expenses in the accompanying consolidated statements of earnings and were as follows:

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Changes in fair value, net of foreign currency remeasurements

DECIEM stock options exercised ( 114 )

Translation adjustments and other, net 2

DECIEM stock option liability as of June 30, 2024 $ —

(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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Nonfinancial assets measured at fair value on a nonrecurring basis

In connection with its interim and annual goodwill and other indefinite-lived intangible asset impairment testing, the Company has measured certain nonfinancial assets at fair value on a nonrecurring basis, classified as Level 3 of the fair value hierarchy.

Refer to 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.

NOTE 15 – REVENUE RECOGNITION

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Accounts Receivable

Accounts receivable, net is stated net of the allowance for doubtful accounts and customer deductions totaling $ 30 million and $ 27 million as of June 30, 2023 and June 30, 2022, respectively.

Accounts receivable, net is stated net of the allowance for doubtful accounts, including credit losses, and customer deductions totaling $ 26 million and $ 30 million as of June 30, 2024 and June 30, 2023, respectively.

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

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The remaining balance of the allowance for doubtful accounts and customer deductions of $ 12 million and $ 14 million, as of June 30, 2024 and June 30, 2023, respectively, relates to non-credit losses, which are primarily due to customer deductions.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred Revenue

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Deferred revenue, end of period $ 560 $ 572

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.

The decrease in Revenue deferred during the period from fiscal 2023 to fiscal 2024 is driven by the deferral of revenue during fiscal 2023 for the Marcolin licensing arrangement relating to the acquisition of the TOM FORD brand, which consisted of a $ 250 million non-refundable upfront payment, classified as deferred revenue within Other accrued liabilities and Other noncurrent liabilities in the accompanying consolidated balance sheets.

Transaction Price Allocated to the Remaining Performance Obligations

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

At June 30, 2024, 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 related to TOM FORD that are unsatisfied (or partially unsatisfied) is $ 327 million.

The remaining balance of deferred revenue at June 30, 2024 will be recognized beyond the next twelve months, of which, $ 223 million relates to the non-refundable upfront payment received as part of the Marcolin licensing arrangement that is being recognized on a straight-line basis over the estimated economic life of the license, which is 20 years.

Royalty Revenue - License Arrangements

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Thereafter $ 160

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

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 – PENSION, DEFERRED COMPENSATION AND POST-RETIREMENT BENEFIT PLANS

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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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Amortization of:

Actuarial loss 3 15 20 ( 3 ) 2 4 — 1 —

Actuarial loss (gain)

4 3 15 ( 8 ) ( 3 ) 2 — — 1

Prior service cost 1 — — ( 1 ) ( 1 ) ( 1 ) ( 3 ) — —

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1.50 – 5.00 %

Weighted-average assumptions used to determine benefit obligations at June 30:

Discount rate 5.68 % 5.29 % 4.48 % 3.50 % 3.69 % 2.77 % 5.51 % 5.19 % 4.68 %

Rate of compensation increase 2.50 – 8.00 %

2.50 – 8.00 %

3.00 % 3.08 % 3.08 % N/A N/A N/A

Assumptions used to determine net periodic benefit cost for the year ended June 30:

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4.50 – 9.75 %

2.70 – 9.00 %

Expected return on assets 6.25 % 6.25 % 6.25 % 2.25 – 9.00 %

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1.75 – 5.00 %

(1) The weighted-average assumptions used to determine benefit obligations at June 30, 2023 were as follows:

Discount rate - 5.29 % (U.S.), 3.69 % (International) and 5.19 % (Other than Pension Plans, Post-retirement)

Rate of compensation increase - 2.50 % - 8.00 %, graded (U.S.), 3.08 % (International) and N/A (Other than Pension Plans, Post-retirement)

The weighted-average assumptions used to determine benefit obligations at June 30, 2022 were as follows:

Discount rate - 4.48 % (U.S.), 2.77 % (International) and 4.68 % (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)

(2) The weighted-average assumptions used to determine net periodic benefit cost for the year ended June 30, 2023 were as follows:

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.), 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)

The weighted-average assumptions used to determine net periodic benefit cost for the year ended June 30, 2022 were as follows:

Discount rate - 2.94 % (U.S.), 1.59 % (International) and 2.92 % (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)

Rate of compensation increase - 2.50 % - 8.00 %, graded (U.S.), 2.81 % (International) and N/A (Other than Pension Plans, Post-retirement)

Weighted-average assumptions used to determine net periodic benefit cost for the year ended June 30:

Discount rate 5.29 % 4.48 % 2.94 % 3.69 % 2.77 % 1.59 % 5.19 % 4.68 % 2.92 %

Expected return on assets (1)

6.25 % 6.25 % 6.25 % 4.06 % 2.95 % 2.19 % 6.25 % 6.25 % 6.25 %

Rate of compensation increase 2.50 – 8.00 %

2.50 – 8.00 %

3.08 % 2.96 % 2.81 % N/A

post-retirement benefit plan is the only post-retirement benefit plan with plan assets during fiscal 2024 and as such, the rates reflected here are the expected return on plan assets for the U.S.

post-retirement plan.

THE ESTÉE LAUDER COMPANIES INC.

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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 4.00 % and 4.02 % as of and for the years ended June 30, 2023 and 2022, respectively.

Pension Plans was 5.20 % and 4.00 % as of and for the years ended June 30, 2024 and 2023, respectively.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans.

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Net actuarial losses (gains), beginning of year $ 235 $ ( 7 ) $ 7 $ 235

Actuarial losses recognized 68 4 7 79

Actuarial losses (gains) recognized

37 ( 4 ) ( 6 ) 27

Amortization and settlements included in net periodic benefit cost ( 4 ) 8 — 4

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Amortization included in net periodic benefit cost ( 1 ) 1 3 3

Prior service cost recognized

— — ( 25 ) ( 25 )

Net prior service cost, end of year 1 ( 1 ) ( 22 ) ( 22 )

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Fair value of plan assets $ 801 $ 753 $ — $ — $ 567 $ 541 $ — $ 2

International pension plans with projected benefit obligations in excess of the plans’ assets had aggregate projected benefit obligations of $ 275 million and $ 265 million and aggregate fair value of plan assets of $ 179 million and $ 156 million at June 30, 2023 and 2022, respectively.

International pension plans with accumulated benefit obligations in excess of the plans’ assets had aggregate accumulated benefit obligations of $ 84 million and $ 95 million and aggregate fair value of plan assets of $ 3 million and $ 6 million at June 30, 2023 and 2022, respectively.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

International pension plans with projected benefit obligations in excess of the plans’ assets had aggregate projected benefit obligations of $ 102 million and $ 275 million and aggregate fair value of plan assets of $ 3 million and $ 179 million at June 30, 2024 and 2023, respectively.

International pension plans with accumulated benefit obligations in excess of the plans’ assets had aggregate accumulated benefit obligations of $ 89 million and $ 84 million and aggregate fair value of plan assets of $ 3 million and $ 3 million at June 30, 2024 and 2023, respectively.

The expected cash flows for the Company’s pension and post-retirement plans are as follows:

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Years 2030 – 2034 334 169 53

The Company’s investment strategy for its pension and post-retirement plan assets is to maintain a diversified portfolio of asset classes with the primary goal of meeting long-term cash requirements as they become due.

The Company’s investment strategy for its pension plan assets is to maintain a diversified portfolio of asset classes with the primary goal of meeting long-term cash requirements as they become due.

Assets are primarily invested in diversified funds that hold equity or debt securities to maintain the security of the funds while maximizing the returns within each plan’s investment policy.

1 unchanged sentence

The Company’s target asset allocation at June 30, 2024 is as follows:

Pension Plans Other than

Pension Plans

International Post-retirement

International

Equity 39 % 20 %

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Other 11 % 22 %

100 % 100 % 100 %

The following is a description of the valuation methodologies used for plan assets measured at fair value:

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For some assets the Company is utilizing the NAV as a practical expedient and those investments are not included in the valuation hierarchy.

Government and agency securities – The fair values are determined using third-party pricing services using market prices or prices derived from observable market inputs such as benchmark curves, broker/dealer quotes, and other industry and economic factors.

These investments are classified within Level 2 of the valuation hierarchy.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

These investments are classified within Level 1 of the valuation hierarchy as of June 30, 2024 and within Level 2 as of June 30, 2023.

This change in classification is due to the ability to use unadjusted daily quoted market prices for all of the underlying assets in this category.

Commingled funds – The fair values of publicly traded funds are based upon market quotes and are classified within Level 1 of the valuation hierarchy.

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401(k) Savings Plan (U.S.)

The Company’s 401(k) Savings Plan (“Savings Plan”) is a contributory defined contribution plan covering substantially all regular U.S.

The Company’s 401(k) Savings Plan (“Savings Plan”) is a contributory defined contribution plan covering substantially all regular full-time U.S.

employees who have completed the hours and service requirements, as defined by the plan document.

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The amounts included in the accompanying consolidated balance sheets under these plans were $ 44 million and $ 58 million as of June 30, 2024 and 2023, respectively.

The expense (benefit) for fiscal 2023, 2022 and 2021 was $( 7 ) million, $( 33 ) million and $ 31 million, respectively.

The benefit for fiscal 2024, 2023 and 2022 was $ 14 million, $ 7 million and $ 33 million, respectively.

THE ESTÉE LAUDER COMPANIES INC.

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(2) Unconditional purchase obligations primarily include:

inventory commitments, deferred consideration, capital expenditure commitments, information technology contract commitments, royalty payments pursuant to license agreements and advertising commitments.

inventory commitments, information technology contract commitments, deferred consideration, advertising commitments and royalty payments pursuant to license agreements.

Future royalty and advertising commitments were estimated based on planned future sales for the term that was in effect at June 30, 2024, without consideration for potential renewal periods.

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Legal Proceedings

The Company is involved, from time to time, in litigation and other legal proceedings incidental to its business, including product liability matters (including asbestos-related claims), advertising, regulatory, employment, intellectual property, real estate, environmental, trade relations, tax, and privacy.

Management believes that the outcome of current litigation and legal proceedings will not have a material adverse effect upon the Company’s business, results of operations, financial condition or cash flows.

However, management’s assessment of the Company’s current litigation and other legal proceedings could change in light of the discovery of facts with respect to legal actions or other proceedings pending against the Company not presently known to the Company or determinations by judges, juries or other finders of fact which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or proceedings.

Reasonably possible losses in addition to the amounts accrued for such litigation and legal proceedings are not material to the Company’s consolidated financial statements.

Reasonably possible losses in addition to the amounts accrued for such litigation and legal proceedings above, as well as the Securities Class Action and Derivative Matters referred to below, are not material to the Company’s consolidated financial statements.

Securities Class Action and Derivative Matters

On December 7, 2023 and January 22, 2024, the Company and its Chief Executive Officer and Chief Financial Officer were named as defendants in separate purported securities class action complaints filed in the United States District Court for the Southern District of New York.

On February 20, 2024, those two purported securities class actions were consolidated into one action.

On March 22, 2024, plaintiffs filed their consolidated amended class action complaint, which alleges that defendants made materially false and misleading statements during the period February 3, 2022 to October 31, 2023 in press releases, the Company’s public filings and during conference calls with analysts that artificially inflated the price of the Company’s stock in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

Defendants intend to defend the action vigorously.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On February 1, 2024 and March 15, 2024, shareholder derivative action complaints were filed against certain of the Company’s officers, all the Company’s directors as of those dates and certain of the Company’s former directors as of those dates in the United States District Court for the Southern District of New York.

In April 2024, both complaints were voluntarily dismissed without prejudice;

and, subsequently, one of the former derivative plaintiffs made a litigation demand, requesting, among other things, that the Company's Board of Directors investigate potential claims on behalf of the Company based on the same alleged course of conduct identified in the securities case complaint (which were also reflected in the dismissed shareholder derivative actions complaints) described above.

In June 2024, the other former derivative plaintiff made a books and records demand on the Company related to any documents relevant to the same alleged course of conduct referenced above.

Cosmetic Talcum Powder Matters

The Company has been named as a defendant in civil actions alleging that certain cosmetic talcum powder products sold by the Company were contaminated with asbestos.

Most of these actions involve a number of co-defendants from a variety of different industries.

As of June 30, 2024, there were 273 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 185 cases as of June 30, 2023.

During the year ended June 30, 2024, 200 new cases were filed and 112 cases were resolved by voluntary dismissal, dismissal by the court, or settlement.

The value of settlements, either individually or in the aggregate, in fiscal 2024, 2023, and 2022 was not material.

The Company believes that a portion of its costs incurred in defending and resolving these claims may be covered by insurance policies issued by several insurance carriers, subject to deductibles, exclusions, retentions and policy limits.

While the Company and its legal counsel intend to continue to defend these cases vigorously, there can be no assurances regarding the ultimate resolution of these matters.

The amounts accrued for such litigation are not material to the Company's consolidated financial statements.

The range of reasonably possible losses in excess of accrued liabilities currently cannot be reasonably estimated.

NOTE 18 – COMMON STOCK

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Acquisition of treasury stock (1)

( 7,393.6 ) —

Conversion of Class B to Class A 2,700.0 ( 2,700.0 )

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Acquisition of treasury stock (1)

Conversion of Class B to Class A 2,700.0 ( 2,700.0 )

( 1,220.7 ) —

Stock-based compensation 1,785.1 —

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Acquisition of treasury stock (1)

Conversion of Class B to Class A — —

Stock-based compensation 1,385.2 —

Balance at June 30, 2024 233,146.6 125,542.0

(1) In fiscal 2022 and 2023, these amounts represent shares repurchased under our authorized share repurchase program, as well as shares repurchased to satisfy tax withholding obligations upon the payout of certain stock-based compensation arrangements.

In fiscal 2024, these amounts represent shares that were repurchased by the Company to satisfy tax withholding obligations upon the payout of certain stock-based compensation arrangements.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company is authorized by the Board of Directors to repurchase Class A Common Stock in the open market or in privately negotiated transactions, depending on market conditions and other factors.

As of June 30, 2024, the remaining authorized share repurchase balance was 25.1 million shares.

Beginning in December 2022, the Company suspended the repurchase of shares of our Class A Common Stock.

The Company may resume repurchases in the future.

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, 2024:

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August 17, 2023 August 31, 2023 September 15, 2023 $ .66

November 1, 2022 November 30, 2022 December 15, 2022 $ .66

October 31, 2023 November 30, 2023 December 15, 2023 $ .66

February 2, 2024 February 29, 2024 March 15, 2024 $ .66

May 2, 2023 May 31, 2023 June 15, 2023 $ .66

April 30, 2024 May 31, 2024 June 17, 2024 $ .66

On August 16, 2024, a dividend was declared in the amount of $ .66 per share on the Company's Class A and Class B Common Stock.

The dividend is payable in cash on September 16, 2024 to stockholders of record at the close of business on August 30, 2024.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19 – STOCK PROGRAMS

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As of June 30, 2024, the total unrecognized compensation cost related to unvested stock-based awards was $ 208 million and the related weighted-average period over which it is expected to be recognized is approximately one year .

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

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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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The exercise period for all stock options generally may not exceed ten years from the date of grant.

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Treasury strip rate for the expected term of the options and the average dividend yield is based on historical experience.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units

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Dividend equivalents 45.0 200.19

Vested ( 744.9 ) 250.41

( 849.7 ) 262.76

Forfeited ( 148.8 ) 201.52

1 unchanged sentence

2,442.5 196.69

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1) The total fair value of RSUs vested during fiscal 2024, 2023 and 2022 was $ 91.6 million, $ 155.5 million, and $ 307.4 million, respectively.

Performance Share Units

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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 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.

In August 2023, less than 0.1 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 with a performance period ended June 30, 2023.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of the status of the Company’s PSUs as of June 30, 2024 and activity during the fiscal year then ended:

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Vested and issued (1)

( 44.8 ) 218.12

Forfeited ( 111.0 ) 217.85

Nonvested at June 30, 2024

(1) Includes approximately 0.1 million PSUs with a performance period ended June 30, 2023 expected to be issued in August 2023.

(1) The total fair value of PSUs vested and issued during fiscal 2024, 2023 and 2022 was $ 7.3 million, $ 66.6 million, and $ 108.9 million, respectively.

Long-term Performance Share Units

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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.

2 unchanged sentences

The aggregate grant date fair value of the PSUs of approximately $ 20 million was estimated using the closing stock price of the Company's Class A Common Stock on the date of grant.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-term Price-Vested Units

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Converted (1)

( 10.0 ) 105.78

Outstanding at June 30, 2024 113.6 90.02

(1) The total intrinsic value of share units converted during fiscal 2024, 2023 and 2022 was $ 1.5 million, $ 4.1 million, and $ 8.5 million, respectively.

Certain non-employee directors defer cash compensation in the form of cash payout share units, which are not subject to the Plans.

These share units are classified as liabilities and, as such, their fair value is adjusted to reflect the current market value of the Company’s Class A Common Stock.

The Company recorded $( 8 ) million, $( 5 ) million and $ 29 million as compensation expense (income) to reflect additional deferrals and the change in the market value for fiscal 2023, 2022 and 2021, respectively.

The Company recorded $ 13 million, $ 8 million and $ 5 million as compensation income to reflect additional deferrals and the change in the market value for fiscal 2024, 2023 and 2022, respectively.

DECIEM Stock Options

As a result of the fiscal 2021 acquisition of additional shares of DECIEM, the Company has a stock option plan relating to its majority-owned subsidiary DECIEM (“DECIEM Stock Option Plan”).

As a result of the fiscal 2021 acquisition of additional shares of DECIEM, the Company had a stock option plan relating to its majority-owned subsidiary DECIEM (“DECIEM Stock Option Plan”).

The DECIEM stock options were issued in replacement of and exchange for certain vested and unvested DECIEM employee stock options previously issued by DECIEM.

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

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.

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

The DECIEM stock options were reported as a stock option liability of $ 99 million in Other accrued liabilities in the accompanying consolidated balance sheets at June 30, 2023.

The DECIEM stock options were liability-classified awards as they were expected to be settled in cash and were remeasured to fair value at each reporting date through date of settlement, with a corresponding charge to compensation expense.

Total stock-based compensation expense is attributable to the exchange or replacement of and the remaining requisite service period of stock options.

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.

The total stock option expense (income) , net of foreign currency remeasurements, for the year ended June 30, 2024, 2023 and 2022 was $ 13 million, $ 22 million and $( 55 ) million, respectively, and as a result of the settlement of the stock option liability in the fourth quarter of fiscal 2024, the Company also incurred $ 10 million in employer-related payroll taxes.

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.

THE ESTÉE LAUDER COMPANIES INC.

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(Shares in thousands) Shares Weighted-

Price Per Share Aggregate

(in millions)

Weighted-Average

Contractual Life

Remaining in Years

Price Per Share

Outstanding at June 30, 2023

Granted at fair value — —

Exercised 94.1 56.65

Forfeited — —

Outstanding at June 30, 2024

94.1 58.48 $ 104 0.92

Vested at June 30, 2023

94.1 58.48 $ 104 0.92

Exercisable at June 30, 2023

(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 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.

Stock options granted to individuals under the DECIEM 2021 Stock Option Plan had a per-share weighted average grant date fair value of $ 1,557 .

There were no options granted during fiscal 2024, 2023 and 2022.

Stock options granted vested between two to seven tranches over a service period of up to two years and all post-combination options were fully vested as of June 30, 2023.

The total fair value of vested awards during fiscal 2023 and 2022 was not material.

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:

Year Ended June 30

2023 2022 2021

Per-share weighted-average grant date fair value of stock options granted $ — $ — $ 1,557

Intrinsic value of stock options exercised $ — $ — $ —

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

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, 2023 June 30, 2022 June 30, 2021

During fiscal 2024, all the DECIEM stock options were exercised and the intrinsic value of the stock options exercised was $ 114 million, which represented the cash paid to settle the DECIEM stock option liability.

The DECIEM stock option liability as of June 30, 2023 and June 30, 2022 was measured using the Monte Carlo Method, which required certain significant assumptions including the starting equity value, revenue growth rates and EBITDA assumptions.

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

Changes to the discount rates or volatilities would have had a lesser effect.

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

The following key assumptions were also used in the Monte Carlo Method:

June 30, 2023 June 30, 2022

Risk-free rate 4.90 % 3.20 %

Term to mid of last twelve-month period 0.46 years 1.42 years 2.42 years

Term to mid of last twelve-month period 0.46 years 1.42 years

Operating leverage adjustment 0.45 0.45

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Net sales volatility 14.40 % 15.30 %

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20 – CHANGES IN OWNERSHIP INTEREST ON NET EARNINGS ATTRIBUTABLE TO THE ESTÉE LAUDER COMPANIES INC.

The following table summarizes the effects of changes in ownership of redeemable noncontrolling interest and noncontrolling interests on the Company's equity:

Year Ended June 30

2024 2023 2022

Net earnings attributable to The Estée Lauder Companies Inc.

$ 390 $ 1,006 $ 2,390

Transfers from redeemable noncontrolling interest:

Increase in paid-in capital as a result of the purchase of shares from redeemable noncontrolling interest

Transfers from noncontrolling interests:

Decrease in paid-in capital as a result of the purchase of shares from noncontrolling interests

Total effect of changes in ownership interest on equity attributable to The Estée Lauder Companies Inc.

$ 552 $ 1,006 $ 2,371

NOTE 21 – NET EARNINGS ATTRIBUTABLE TO THE ESTÉE LAUDER COMPANIES INC.

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Net derivative instruments, beginning of year $ 44 $ 68 $ ( 2 )

Gain (loss) on derivative instruments (1)

Benefit (provision) for deferred income taxes ( 11 ) ( 21 ) 10

Gain on derivative instruments (1)

Provision for income taxes

( 18 ) ( 11 ) ( 21 )

Reclassification to earnings during the year:

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Cross-currency swap contracts (1)(4)

Benefit (provision) for deferred income taxes on reclassification (5)

( 19 ) ( 9 ) —

Benefit for income taxes on reclassification (5)

Net derivative instruments, end of year 52 44 68

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Translation adjustments 1 ( 1 ) —

Benefit (provision) for deferred income taxes 17 ( 18 ) ( 12 )

Benefit (provision) for income taxes

Amortization and settlements included in net periodic benefit cost (6) :

Net actuarial losses — 18 24

Net actuarial gains (losses)

Net prior service cost ( 3 ) ( 1 ) ( 1 )

Settlements — 1 —

Provision for deferred income taxes on reclassification (5)

— ( 4 ) ( 5 )

Benefit (provision) for income taxes on reclassification (5)

Net pension and post-retirement adjustments, end of year ( 183 ) ( 177 ) ( 114 )

Cumulative translation adjustments, beginning of year ( 801 ) ( 716 ) ( 289 )

Reclassification to earnings during the year — — ( 1 )

Translation adjustments (7)

( 129 ) ( 112 ) ( 409 )

Benefit (provision) for deferred income taxes 27 ( 18 ) 2

Purchase of shares from redeemable noncontrolling interest (8)

Benefit (provision) for income taxes

( 6 ) 27 ( 18 )

Cumulative translation adjustments, end of year ( 1,009 ) ( 801 ) ( 716 )

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(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 .

(6) Reclassification adjustments for pension and post-retirement plans is recorded in Other components of net periodic benefit cost in the accompanying consolidated statements of earnings.

(7) See Note 13 – Derivative Financial Instruments for gains (losses) relating to net investment hedges.

(8) Upon purchase of the remaining interest in DECIEM during the fourth quarter of fiscal 2024, the cumulative amount of translation adjustments were reallocated from redeemable noncontrolling interest back to the Company.

THE ESTÉE LAUDER COMPANIES INC.

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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 15 - 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.

Product category performance is measured based upon net sales before returns associated with restructuring and other activities, and operating income (loss) before charges associated with restructuring and other activities.

Returns and charges associated with restructuring and other activities are not allocated to the Company's product categories or geographic regions because they are centrally directed and controlled, are not included in internal measures of product category or geographic region performance and result from activities that are deemed Company-wide initiatives to redesign, resize and reorganize select areas of the business.

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thus, no additional information is produced for the Chief Executive or included herein.

During the fiscal 2024 second quarter, the Company identified and corrected prior-period misclassifications of net sales and operating income between certain of the Company’s product categories in its segment footnote.

As a result, product category net sales and operating income have been adjusted from the amounts previously reported for the fiscal years ended June 30, 2023 and 2022, for comparability purposes.

The misclassifications had no impact on the current-period or prior-period consolidated statements of earnings, consolidated statements of comprehensive income, consolidated balance sheets, or the consolidated statements of cash flows, and the Company determined that the impact on the Company’s current-period and previously issued financial statements for the respective periods was not material.

THE ESTÉE LAUDER COMPANIES INC.

59 unchanged sentences

$ 4,969 $ 4,976 $ 4,599

(1) The net sales from the Company’s travel retail business are included in the Europe, the Middle East & Africa region, with the exception of net sales of Dr.Jart+ in the travel retail channel that are reflected in Korea in the Asia/Pacific region.

Operating income attributable to the travel retail sales included in Europe, the Middle East & Africa is included in that region and in The Americas.

(1) The net sales from the Company’s travel retail business are included in the Europe, the Middle East & Africa region, and operating income attributable to these net sales are included in that region and in The Americas.

The exception is for net sales and operating income of Dr.Jart+ in the travel retail channel in Korea that are reflected in Korea in the Asia/Pacific region.

(2) Includes property, plant and equipment, net and operating lease ROU assets.

6 unchanged sentences

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below presents the effect of the corrections for fiscal years ended June 30, 2023 and 2022.

Year Ended June 30, 2023

Year Ended June 30, 2022

(In millions) As Previously Reported

As Previously Reported

PRODUCT CATEGORY DATA

Skin Care $ 8,202 $ 47 $ 8,249 $ 9,886 $ 16 $ 9,902

Makeup 4,516 16 4,532 4,667 3 4,670

Fragrance 2,512 ( 61 ) 2,451 2,508 ( 17 ) 2,491

Hair Care 653 ( 1 ) 652 631 — 631

Other 54 ( 1 ) 53 49 ( 2 ) 47

15,937 — 15,937 17,741 — 17,741

Returns associated with restructuring and other activities ( 27 ) — ( 27 ) ( 4 ) — ( 4 )

Net sales $ 15,910 $ — $ 15,910 $ 17,737 $ — $ 17,737

Operating income (loss):

Skin Care $ 1,204 $ 73 $ 1,277 $ 2,753 $ 23 $ 2,776

Makeup ( 22 ) 1 ( 21 ) 133 ( 7 ) 126

Fragrance 440 ( 70 ) 370 456 ( 15 ) 441

Hair Care ( 34 ) ( 2 ) ( 36 ) ( 28 ) — ( 28 )

Other 6 ( 2 ) 4 0 ( 1 ) ( 1 )

1,594 — 1,594 3,314 — 3,314

Charges associated with restructuring and other activities ( 85 ) — ( 85 ) ( 144 ) — ( 144 )

Operating income $ 1,509 $ — $ 1,509 $ 3,170 $ — $ 3,170

THE ESTÉE LAUDER COMPANIES INC.

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

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of Period (1)

Accounts (a) Deductions Balance

Accounts Deductions Balance

Reserves deducted in the balance sheet from the assets to which they apply:

Allowance for doubtful accounts and customer deductions:

Year ended June 30, 2023 $ 27 $ 21 $ — $ 18 (b) $ 30

Year ended June 30, 2022 $ 40 $ 5 $ — $ 18 (b) $ 27

Year ended June 30, 2021 $ 63 $ ( 5 ) $ 4 $ 22 (b) $ 40

Year ended June 30, 2024 $ 30 $ 7 $ — $ 11 (a) $ 26

Year ended June 30, 2023 $ 27 $ 21 $ — $ 18 (a) $ 30

Year ended June 30, 2022 $ 40 $ 5 $ — $ 18 (a) $ 27

Deferred tax valuation allowance:

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Year ended June 30, 2022 $ 168 $ 41 $ — $ 24 $ 185

(a) For the year ended June 30, 2021, “Charged to Other Accounts” includes the impact of the fiscal 2021 adoption of ASC 326 of $ 4 million, pre-tax.

(b) Includes amounts written-off, net of recoveries.

(a) Includes amounts written-off, net of recoveries.

THE ESTÉE LAUDER COMPANIES INC.

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Global Note for the 3.700% Senior Notes due 2042 (filed as Exhibit 4.4 to our Current Report on Form 8-K filed on August 2, 2012) (SEC File No.

4.10 Global Note for the 3.700% Senior Notes due 2042 (filed as Exhibit 4.4 to our Current Report on Form 8-K filed on August 2, 2012) (SEC File No.

Officers’ Certificate, dated June 4, 2015, defining certain terms of the 4.375% Senior Notes due 2045 (filed as Exhibit 4.1 to our Current Report on Form 8-K filed on June 4, 2015) (SEC File No.

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Form of Global Note for the 4.150% Senior Notes due 2047 (included as Exhibit A in Exhibit 4.5 to our Current Report on Form 8-K filed on February 9, 2017) (SEC File No.

Number Description

Form of Global Note for the 2.000% Senior Notes due 2024 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on November 21, 2019) (SEC File No.

Number Description

Officers’ Certificate, dated November 21, 2019, defining certain terms of the 2.375% Senior Notes due 2029 (filed as Exhibit 4.3 to our Current Report on Form 8-K filed on November 21, 2019) (SEC File No.

12 unchanged sentences

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.

Form of Global Note for the 5.000% Senior Notes due 2034 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on February 14, 2024) (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.

25 unchanged sentences

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.

10.5a Executive Annual Incentive Plan (filed as Exhibit 10.5a to our Annual Report on Form 10-K filed on August 18, 2023) (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.

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.

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.

1 unchanged sentence

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.

10.12 Employment Agreement with Peter Jueptner (filed as Exhibit 10.12 to our Annual Report on Form 10-K filed on August18, 2023) (SEC File No.

E mployment Agreement with Stéphane de La Faverie (SEC File No.