What changed in this filing

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Item 9A. Controls and Procedures

2025-08-20 compared with 2024-08-19 · 871 added, 697 removed, 2201 unchanged (42% of the section changed)

15 unchanged sentences

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.

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

Executive Compensation .

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

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

The information required by this Item, not already provided under Equity Compensation Plan Information as set forth below, will be included in the 2025 Proxy Statement.

The 2025 Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, 2025 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, 2025 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, 2025

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)

14,234,962 $175.21 15,285,363

(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 8,686,470 shares issuable upon exercise of outstanding options, 4,301,768 shares issuable upon conversion of outstanding Restricted Stock Units, 985,340 shares issuable upon conversion of outstanding Performance Share Units (“PSUs”) (assuming maximum payout for unvested PSUs, including those pending approval by the Stock Plan Subcommittee of our Board of Directors), 106,879 shares issuable upon conversion of Share Units and 154,505 shares issuable upon conversion of Long-term PSUs, including Price-vested units (“PVUs”).

(3) Calculated based upon outstanding options in respect of 8,686,470 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, 2025, there were 14,942,974 shares of Class A Common Stock available for issuance under the 2002 Plan (assuming maximum payout for unvested PSUs, including those pending approval by the Stock Plan Subcommittee of our Board of Directors).

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, 2025, there were 342,390 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, 2025, the total shares of Common Stock outstanding (i.e.

Class A plus Class B) would increase 8% to 389,287,179.

Of the outstanding options to purchase 8,686,470 shares of Class A Common Stock, options to purchase 580,243 shares have an exercise price less than $80.80, the closing price on June 30, 2025.

Assuming the exercise of only in-the-money options, the total shares outstanding would increase by less than 1% to 360,347,097.

Certain Relationships and Related Transactions, and Director Independence.

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

Amendments to The Estee Lauder Companies Retirement Growth Account Plan, as amended and restated effective as of January 1, 2023, as further amended effective January 1, 2025 (filed as Exhibit 10.5 to our Quarterly Report on Form 10-Q filed on February 4, 2025) (SEC File No.

10.4 The Estee Lauder Inc.

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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.

Executive Annual Incentive Plan (SEC File No.

10.6 Employment Agreement with Tracey T.

14 unchanged sentences

Lauder (filed as Exhibit 10.7f to our Annual Report on Form 10-K filed on August 20, 2015) (SEC File No.

Number Description

10.7g Amendment to Employment Agreement with Leonard A.

2 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.

2 unchanged sentences

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.

Second Amendment to Employment Agreement with Fabrizio Freda (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on February 4, 2025) (SEC File No.

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

1 unchanged sentence

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 Stéphane de La Faverie (filed as Exhibit 10.13 to our Annual Report on Form 10-K filed on August 19, 2024) (SEC File No.

Amended and Restated Employment Agreement with Stéphane de La Faverie (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on February 4, 2025) (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.

Employment Agreement with Rashida La Lande (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.

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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.

Number Description

The Estée Lauder Companies Inc.

5 unchanged sentences

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

Summary of Compensation for Non-Employee Directors of the Company (filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q filed on February 4, 2025) (SEC File No.

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.

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

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.

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 13, 2024) (SEC File No.

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

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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.

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.

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

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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.

Number Description

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

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

Number Description

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 10.3 to our Quarterly Report on Form 10-Q filed on February 4, 2025) (SEC File No.

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

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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.

Form of Restricted Stock 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) (SEC File No.

Form of Non-annual Restricted Stock 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) (SEC File No.

Form of PRGP Non-annual Restricted Stock 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) (SEC File No.

10.22 $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.

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

Number Description

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

18 unchanged sentences

and Aerin Lauder Zinterhofer effective July 1, 2024.

Number Description

(filed as Exhibit 10.25d to our Annual Report on Form 10-K filed on August 19, 2024) (SEC File No.

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

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The Estée Lauder Companies Inc.

Insider Trading Policies.

Insider Trading Policies (filed as Exhibit 19.1 to our Annual Report on Form 10-K filed on August 19, 2024) (SEC File No.

21.1 List of significant subsidiaries.

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The Estée Lauder Companies Inc.

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

Incentive-Based Compensation Recovery Policy (2023 Clawback Policy) (filed as Exhibit 97.1 to our Annual Report on Form 10-K filed on August 19, 2024) (SEC File No.

Number Description

101.1 The following materials from The Estée Lauder Companies Inc.’s Annual Report on Form 10-K for the year ended June 30, 2025 are formatted in iXBRL (Inline eXtensible Business Reporting Language):

(i) the Consolidated Statements of Earnings, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements

(i) the Consolidated Statements of (Loss) Earnings, (ii) the Consolidated Statements of Comprehensive (Loss) Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements

104 The cover page from The Estée Lauder Companies Inc.’s Annual Report on Form 10-K for the year ended June 30, 2025 is formatted in iXBRL

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THE ESTÉE LAUDER COMPANIES INC.

By /s/ TRACEY T.

By /s/ AKHIL SHRIVASTAVA

Akhil Shrivastava

Executive Vice President

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Signature Title (s) Date

FABRIZIO FREDA* President, Chief Executive Officer

STÉPHANE DE LA FAVERIE*

President, Chief Executive Officer

and a Director

(Principal Executive Officer) August 20, 2025

Fabrizio Freda

LAUDER* Executive Chairman

and a Director August 19, 2024

Stéphane de La Faverie

CHARLENE BARSHEFSKY* Director August 20, 2025

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Angela Wei Dong

LYNN FORESTER DE ROTHSCHILD* Director August 20, 2025

Lynn Forester de Rothschild

FRIBOURG* Director August 20, 2025

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JANE LAUDER* Director August 20, 2025

LAUDER* Director August 19, 2024

LAUDER* Chair of the Board

August 20, 2025

ARTURO NUÑEZ* Director August 20, 2025

PARSONS* Director August 19, 2024

LYNN FORESTER DE ROTHSCHILD* Director August 19, 2024

Lynn Forester de Rothschild

STERNLICHT* Director August 20, 2025

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ZANNINO* Director August 20, 2025

/s/ TRACEY T.

TRAVIS Executive Vice President and

Director August 20, 2025

/s/ AKHIL SHRIVASTAVA

Executive Vice President and

Chief Financial Officer

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Accounting Officer) August 20, 2025

Akhil Shrivastava

___________________________________________

* By signing her name hereto, Tracey T.

Travis signs this document in the capacities indicated above and on behalf of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed herewith.

By /s/ TRACEY T.

* By signing his name hereto, Akhil Shrivastava signs this document in the capacities indicated above and on behalf of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed herewith.

By /s/ AKHIL SHRIVASTAVA

Akhil Shrivastava

(Attorney-in-Fact)

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

Consolidated Statements of Earnings

Consolidated Statements of Comprehensive Income

Consolidated Statements of (Loss) Earnings

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Balance Sheets

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The effectiveness of the Company’s internal control over financial reporting as of June 30, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears under the heading “Report of Independent Registered Public Accounting Firm.”

/s/ Fabrizio Freda /s/ Tracey T.

Fabrizio Freda Tracey T.

/s/ Stéphane de La Faverie

/s/ Akhil Shrivastava

Stéphane de La Faverie

Akhil Shrivastava

President and Chief Executive Officer Executive Vice President and Chief Financial Officer

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of The Estée Lauder Companies Inc.

To the Board of Directors and Stockholders of The Estée Lauder Companies Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

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

and its subsidiaries (the “Company”) as of June 30, 2024 and 2023, and the related consolidated statements of earnings, of comprehensive income, of equity and redeemable noncontrolling interest and of cash flows for each of the three years in the period ended June 30, 2024, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended June 30, 2024 appearing on page S-1 (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of June 30, 2025 and 2024, and the related consolidated statements of (loss) earnings, of comprehensive (loss) income, of equity and redeemable noncontrolling interest and of cash flows for each of the three years in the period ended June 30, 2025, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended June 30, 2025 appearing on page S-1 (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Critical Audit Matters

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

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

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;

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 Indefinite-Lived Intangible Asset Impairment Assessment – TOM FORD Trademark

As described in Notes 2 and 6 to the consolidated financial statements, the Company’s consolidated indefinite-lived intangible assets balance was $3,123 million as of June 30, 2025, of which $1,805 million relates to the TOM FORD trademark.

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

Management concluded that the changes in circumstances in the TOM FORD brand, along with increases in the weighted average cost of capital, triggered the need for an interim impairment review of the TOM FORD trademark.

Accordingly, management performed an interim impairment test as of December 31, 2024.

Management concluded that the carrying value of the TOM FORD trademark exceeded its estimated fair value and recorded an impairment charge of $773 million.

As disclosed by management, the estimated fair value of the trademark intangible asset was determined utilizing an income approach, specifically the relief-from-royalty method.

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

The principal considerations for our determination that performing procedures relating to the interim indefinite-lived intangible asset impairment assessment of the TOM FORD trademark is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the trademark;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, the royalty rate, and the 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 management’s indefinite-lived intangible asset impairment assessment, including controls over the valuation of the TOM FORD trademark.

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

(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, the royalty rate, 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 business;

(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 relief-from-royalty method and (ii) the reasonableness of the royalty rate and weighted average cost of capital significant assumptions.

Annual Indefinite-Lived Intangible Asset Impairment Assessments – DECIEM Trademarks

As described in Notes 2 and 6 to the consolidated financial statements, the Company’s consolidated indefinite-lived intangible assets balance was $3,123 million as of June 30, 2025, and as disclosed by management, $1,069 million relates to the DECIEM trademarks.

Management assesses 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 indefinite-lived intangible asset impairment testing as of April 1, 2025, management determined that the estimated fair values of the DECIEM trademarks exceeded their carrying values.

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

The significant assumptions used in this approach include revenue growth rates and profit margins, 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 asset impairment assessments of the DECIEM trademarks is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the trademarks;

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

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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 indefinite-lived intangible assets impairment assessments, including controls over the valuation of the TOM FORD and Dr.Jart+ trademarks.

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

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

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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;

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

(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.

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 royalty rates and weighted average cost of capital significant assumptions.

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THE ESTÉE LAUDER COMPANIES INC.

CONSOLIDATED STATEMENTS OF EARNINGS

CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS

Year Ended June 30,

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Impairment of other intangible assets

1,273 180 207

Talcum litigation settlement agreements

Total operating expenses 11,382 10,214 9,837

Operating income 970 1,509 3,170

Operating (loss) income

( 785 ) 970 1,509

Interest expense 357 378 255

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Other components of net periodic benefit cost 12 ( 13 ) ( 12 )

Other income, net — — 1

Earnings before income taxes 772 1,397 3,036

(Loss) earnings before income taxes

( 1,040 ) 772 1,397

Provision for income taxes

Net earnings 409 1,010 2,408

Net earnings attributable to noncontrolling interests — — ( 7 )

Net (loss) earnings

( 1,133 ) 409 1,010

Net earnings attributable to redeemable noncontrolling interest

— ( 19 ) ( 4 )

Net earnings attributable to The Estée Lauder Companies Inc.

Net (loss) earnings attributable to The Estée Lauder Companies Inc.

$ ( 1,133 ) $ 390 $ 1,006

Net earnings attributable to The Estée Lauder Companies Inc.

Net (loss) earnings attributable to The Estée Lauder Companies Inc.

per common share

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THE ESTÉE LAUDER COMPANIES INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

Year Ended June 30,

(In millions) 2025 2024 2023

Net earnings $ 409 $ 1,010 $ 2,408

Net (loss) earnings

$ ( 1,133 ) $ 409 $ 1,010

Other comprehensive income (loss):

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

Cross-currency swap contract gain (loss)

Net cash flow hedge loss

( 89 ) ( 3 ) ( 11 )

Cross-currency swap contract - fair value hedge gain (loss)

Retirement plan and other retiree benefit adjustments ( 24 ) ( 9 ) ( 79 )

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Benefit (provision) for income taxes on components of other comprehensive income 18 ( 6 ) 51

Total other comprehensive loss, net of tax

Total other comprehensive income (loss), net of tax

13 ( 150 ) ( 186 )

Comprehensive income 259 824 2,087

Comprehensive income attributable to noncontrolling interests:

Net earnings — — ( 7 )

Translation adjustments — — 4

Total comprehensive income attributable to noncontrolling interests — — ( 3 )

Comprehensive loss (income) attributable to redeemable noncontrolling interest:

Comprehensive (loss) income

( 1,120 ) 259 824

Comprehensive (income) loss attributable to redeemable noncontrolling interest:

Net earnings — ( 19 ) ( 4 )

Translation adjustments — 17 14

Total comprehensive loss (income) attributable to redeemable noncontrolling interest

Comprehensive income attributable to The Estée Lauder Companies Inc.

Total comprehensive (income) loss attributable to redeemable noncontrolling interest

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

$ ( 1,120 ) $ 257 $ 834

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Commitments and contingencies

Redeemable Noncontrolling Interest — 832

Common stock, $ .01 par value;

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Total equity 3,865 5,314

Total liabilities, redeemable noncontrolling interest and equity $ 21,677 $ 23,415

Total liabilities and equity

$ 19,892 $ 21,677

See notes to consolidated financial statements.

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Stock-based compensation 321 364 353

Purchase of shares from noncontrolling interests — — ( 19 )

Purchase of shares from redeemable noncontrolling interest

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Common stock dividends ( 622 ) ( 954 ) ( 927 )

Net earnings attributable to The Estée Lauder Companies Inc.

Net (loss) earnings attributable to The Estée Lauder Companies Inc.

( 1,133 ) 390 1,006

Cumulative effect of adoption of new accounting standards — — 121

Retained earnings, end of year 11,672 13,427 13,991

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

Other comprehensive loss attributable to The Estée Lauder Companies Inc.

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

13 ( 133 ) ( 172 )

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Treasury stock, end of year ( 13,698 ) ( 13,664 ) ( 13,631 )

Total stockholders’ equity – The Estée Lauder Companies Inc.

5,314 5,585 5,590

Noncontrolling interests, beginning of year — — 34

Net earnings attributable to noncontrolling interests — — 7

Purchase of shares from noncontrolling interests — — ( 34 )

Translation adjustments and other, net — — ( 7 )

Noncontrolling interests, end of year — — —

Total equity $ 3,865 $ 5,314 $ 5,585

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Translation adjustments — ( 17 ) ( 14 )

Adjustment of redeemable noncontrolling interest to redemption value — — ( 1 )

Redeemable noncontrolling interest, end of year $ — $ — $ 832

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Cash flows from operating activities

Net earnings $ 409 $ 1,010 $ 2,408

Adjustments to reconcile net earnings to net cash flows from operating activities:

Net (loss) earnings

$ ( 1,133 ) $ 409 $ 1,010

Adjustments to reconcile net (loss) earnings to net cash flows from operating activities:

Depreciation and amortization 829 825 744

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Impairment of goodwill and other intangible assets

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

Other non-cash items 14 ( 8 ) ( 7 )

1,286 471 207

Other adjustments and non-cash items

Changes in operating assets and liabilities:

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184 766 ( 64 )

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

(Increase) decrease in other assets, net

Increase (decrease) in accounts payable 21 ( 38 ) ( 333 )

Increase (decrease) in other accrued and noncurrent liabilities 209 ( 129 ) 1

(Decrease) increase in other accrued and noncurrent liabilities

( 41 ) 209 ( 129 )

Decrease in operating lease assets and liabilities, net ( 34 ) ( 36 ) ( 41 )

1 unchanged sentence

Cash flows from investing activities

Purchases of investments ( 1 ) ( 18 ) ( 8 )

Capital expenditures ( 602 ) ( 919 ) ( 1,003 )

Payments for acquired business

Proceeds from sale of property, plant and equipment

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

Purchases of investments ( 18 ) ( 8 ) ( 10 )

Settlement of net investment hedges ( 23 ) ( 23 ) 80

1 unchanged sentence

Cash flows from financing activities

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

(Repayments) proceeds of current debt, net

— ( 215 ) 218

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

1 unchanged sentence

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

Repayments of long-term debt

( 505 ) ( 10 ) ( 265 )

Debt issuance costs — ( 4 ) ( 15 )

Repayments and redemptions of long-term debt ( 10 ) ( 265 ) ( 18 )

Net proceeds from stock-based compensation transactions 40 88 151

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

Net proceeds from stock-based compensation transactions 15 40 88

Dividends paid to stockholders ( 618 ) ( 947 ) ( 925 )

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

Payments to acquire treasury stock ( 35 ) ( 35 ) ( 271 )

Payment for acquisition of noncontrolling interest ( 21 ) — —

Payment for acquisition of redeemable noncontrolling interest

Net cash flows (used for) provided by financing activities

( 1,144 ) ( 2,035 ) 1,590

Effect of exchange rate changes on Cash and cash equivalents 21 1 ( 32 )

Net increase (decrease) in Cash and cash equivalents ( 634 ) 72 ( 1,001 )

Net (decrease) increase in Cash and cash equivalents

( 474 ) ( 634 ) 72

Cash and cash equivalents at beginning of year 3,395 4,029 3,957

7 unchanged sentences

Products are marketed under owned brand names, including:

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

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

The Estée Lauder Companies Inc.

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

Andrew Weil brand names for fragrances and cosmetics.

Andrew Weil brand names for beauty-related products.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

8 unchanged sentences

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

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

(“DECIEM”) stock options.

Management evaluates the related estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate.

Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, pension and other post-retirement benefit costs, business combinations and asset acquisitions, goodwill, other indefinite-lived intangible assets and long-lived assets, income taxes and legal contingencies.

Management evaluates the related estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, as relevant, and makes adjustments when facts and circumstances dictate.

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

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

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

Currency Translation and Transactions

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

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

were $ 90 million, $( 135 ) million and $( 85 ) million, net of tax, in fiscal 2025, 2024 and 2023, respectively.

For the Company’s subsidiaries operating in highly inflationary economies, the U.S.

dollar is the functional currency.

dollar is the functional currency, and these subsidiaries are not material to the Company's consolidated financial statements or liquidity in fiscal 2025, 2024 and 2023.

Remeasurement adjustments in financial statements in a highly inflationary economy and other transactional gains and losses are reflected in earnings.

These subsidiaries are not material to the Company’s consolidated financial statements or liquidity in fiscal 2024, 2023 and 2022.

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

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

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

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

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

See Note 13 – Derivative Financial Instruments for further discussion .

The Company categorizes these instruments as entered into for purposes other than trading.

The accompanying consolidated statements of earnings include net exchange gains (losses) on foreign currency transactions of $ 77 million, $ 57 million and $( 11 ) million in fiscal 2024, 2023 and 2022, respectively.

The accompanying consolidated statements of (loss) earnings include net exchange gains on foreign currency transactions of $ 58 million, $ 77 million and $ 57 million in fiscal 2025, 2024 and 2023, respectively.

THE ESTÉE LAUDER COMPANIES INC.

9 unchanged sentences

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

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

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

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

9 unchanged sentences

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

In addition, and as necessary, specific reserves for future known or anticipated events may be established.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition, and as necessary, specific reserves may be established for future known or anticipated events.

Derivative Financial Instruments

1 unchanged sentence

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), (iii) designated as a hedge of a net investment in certain foreign operations ("net investment" hedge), or (iv) not designated as a hedging instrument.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

This process includes linking all derivatives to specific assets and liabilities on the balance sheet, net investments in certain foreign operations, 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.

3 unchanged sentences

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).

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.

The Company also enters into foreign currency forward contracts and cross-currency swap 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 accumulated other comprehensive loss ("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.

2 unchanged sentences

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

The cross-currency swap contracts designated as net investment hedges are classified within investing 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.

Cash flows, and their related gains and losses, from the remaining derivative instruments are classified within operating activities.

From a consolidated balance sheet perspective, derivatives with fair values in a net asset position are bifurcated based on the cash flows expected to occur within the next twelve months (current asset or liability) and those expected to occur beyond twelve months (noncurrent asset or liability).

Derivatives with fair values in a net liability position are classified in total as current, regardless of the maturity date.

See Note 13 – Derivative Financial Instruments for further discussion.

3 unchanged sentences

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.

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

For financial statement purposes, depreciation is provided principally on the straight-line method over the estimated useful lives of the assets ranging from 3 to 40 years.

18 unchanged sentences

Goodwill and Other Indefinite-lived Intangible Assets

Goodwill is calculated as the excess of the cost of purchased businesses over the fair value of their underlying net assets.

Goodwill is calculated as the excess of the cost of purchased businesses over the estimated fair value of their underlying net assets.

Other indefinite-lived intangible assets principally consist of trademarks.

4 unchanged sentences

The Company makes certain judgments and assumptions in allocating assets and liabilities to determine carrying values for its reporting units.

When testing goodwill for impairment, the Company has the option of first performing a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test.

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 goodwill for impairment, the Company has the option of first performing a qualitative assessment to determine whether it is more-likely-than-not that the estimated fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test.

The quantitative impairment test for goodwill encompasses calculating the estimated fair value of a reporting unit and comparing the estimated fair value to its carrying value.

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

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

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

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

4 unchanged sentences

When such events or changes in circumstances occur, a recoverability test is performed comparing projected undiscounted cash flows from the use and eventual disposition of an asset or asset group to its carrying value.

If the projected undiscounted cash flows are less than the carrying value, then an impairment charge would be measured and recorded for the excess of the carrying value over the fair value.

Specifically for right-of-use assets, estimated fair value is based on discounting market rent using a real estate discount rate.

The asset group is defined as the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

If the projected undiscounted cash flows are less than the carrying value, then an impairment charge would be measured and recorded for the excess of the carrying value over the estimated fair value.

The calculated impairment loss for an asset group only reduces the carrying amounts of the long-lived assets of the group and is allocated on a pro rata basis using the relative carrying amounts of those assets, however, the allocated impairment loss cannot reduce the carrying amount of a long-lived asset below its estimated fair value.

The Company recognizes a lease liability and a related right-of-use (“ROU”) asset at the commencement date for leases on its consolidated balance sheet, excluding short-term leases as noted below.

2 unchanged sentences

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.

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

Both operating and finance lease ROU assets are reviewed for impairment, consistent with other long-lived assets, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

4 unchanged sentences

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

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

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

2 unchanged sentences

Variable lease payments that are not known at the commencement date and are determinable based on the performance or use of the underlying asset , are not included in the initial measurement of the lease liability or the ROU asset, but instead are expensed as incurred.

The Company’s variable lease payments primarily include rents based on a percentage of sales in excess of stipulated levels, common area maintenance based on the percentage of the total square footage leased by the Company, as well as costs relating to embedded leases, such as third-party manufacturing agreements.

The Company’s variable lease payments primarily include rents based on a percentage of sales in excess of stipulated levels, common area maintenance and real estate taxes based on the percentage of the total square footage leased by the Company, as well as variable costs relating to embedded leases, such as third-party manufacturing and logistics agreements.

Certain of the Company’s contracts contain lease components as well as non-lease components, such as an agreement to purchase services.

1 unchanged sentence

Short-term leases (i.e.

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.

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 earnings on a straight-line basis over the lease term.

THE ESTÉE LAUDER COMPANIES INC.

1 unchanged sentence

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

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

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

See Note 7 – Leases for further information.

1 unchanged sentence

The Company is a worldwide manufacturer, marketer and seller of skin care, makeup, fragrance and hair care products.

The Company’s sales subject to credit risk are made primarily to retailers in its travel retail business, department stores, specialty multi-brand retailers and perfumeries.

The Company’s sales subject to credit risk are made primarily to department stores, duty-free retailers, specialty multi retailers, online pure players, perfumeries and pharmacies, and salons and spas.

The Company grants credit to qualified customers.

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

1 unchanged sentence

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

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

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

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

1 unchanged sentence

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.

As a result, the Company has made a policy election that permits the Company 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.

The Company also sells direct to consumers across freestanding stores, its brands' websites and through third-party online platforms.

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

1 unchanged sentence

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

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

These are comprised of gift with purchase and purchase with purchase promotions, customer loyalty program obligations, gift cards and other promotional products 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.

Revenue is deferred and ultimately recognized based on the timing differences, if any, between when control of these promotional products 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 these promotional products 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.

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

Revenue is allocated between the saleable product revenue and the material right loyalty obligations based on relative standalone selling prices when the consumer purchases the products that are earning them the right to the future benefits.

9 unchanged sentences

Such elements of variable consideration include product returns and sales incentives, such as volume rebates and discounts, markdowns, margin adjustments and early-payment discounts.

We also enter into arrangements containing other forms of variable consideration, including certain demonstration arrangements, for which the Company does not receive a distinct good or service or for which the Company cannot reasonably estimate the fair value of the good or service.

For these types of arrangements, the adjustments to revenue are recorded at the later of when (i) the Company recognizes revenue for the transfer of the related goods or services to the customer, or (ii) the Company pays, or promises to pay, the consideration.

The Company also enters into arrangements containing other forms of variable consideration and makes payments to certain of its customers related to demonstration, advertising and counter construction.

These activities may be arranged either with unrelated third parties or in conjunction with the customer.

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 demonstration and advertising 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 (loss) earnings, and for counter construction, the costs are capitalized into property, plant and equipment and depreciated over their useful lives into Selling, general and administrative expenses in the accompanying consolidated statements of (loss) earnings.

When the Company does not receive a distinct good or service or for which the Company cannot reasonably estimate the fair value of the good or service in these types of arrangements, the adjustments to revenue are recorded at the later of when (i) the Company recognizes revenue for the transfer of the related goods or services to the customer, or (ii) the Company pays, or promises to pay, the consideration.

For the sale of goods with a right of return, the Company only recognizes revenue for the consideration it expects to be entitled to (considering the products to be returned) and records a sales return accrual within Other accrued liabilities for the amount it expects to credit back its customers.

8 unchanged sentences

These estimates are supported by historical results as well as specific facts and circumstances related to the current period.

The Company also enters into transactions and makes payments to certain of its customers related to demonstration, advertising and counter construction, some of which involve cooperative relationships with customers.

These activities may be arranged either with unrelated third parties or in conjunction with the customer.

See Note 15 – Revenue Recognition for further discussion and revenue disaggregated by geographic region .

For revenue disaggregated by product category see Note 24 – Segment Data and Related Information .

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

See Note 15 – Revenue Recognition for further discussion .

For revenue disaggregated by product category and geographic region, see Note 24 – Segment Data and Related Information .

Royalty Revenue - License Arrangements

4 unchanged sentences

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

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

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

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

2 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 – Asset Acquisition and Note 15 - 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 and related revenue recognition impacts.

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 in the accompanying consolidated statements of earnings.

Global net advertising, marketing, promotion and product development expenses of $ 3,643 million, $ 3,657 million and $ 3,711 million in fiscal 2025, 2024 and 2023, respectively, are recorded in Selling, general and administrative expenses in the accompanying consolidated statements of (loss) earnings and are expensed as incurred.

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

Research and development costs of $ 316 million, $ 360 million and $ 344 million in fiscal 2025, 2024 and 2023, respectively, are recorded in Selling, general and administrative expenses in the accompanying consolidated statements of (loss) earnings and are expensed as incurred.

Shipping and Handling

Shipping and handling expenses of $ 792 million, $ 838 million and $ 860 million in fiscal 2024, 2023 and 2022, respectively, are recorded in Selling, general and administrative expenses in the accompanying consolidated statements of earnings and include distribution center costs, promotional shipping costs, third-party logistics costs and outbound freight.

Shipping and handling expenses of $ 729 million, $ 792 million and $ 838 million in fiscal 2025, 2024 and 2023, respectively, are recorded in Selling, general and administrative expenses in the accompanying consolidated statements of (loss) earnings and include distribution center costs, promotional shipping costs, third-party logistics costs and outbound freight.

Royalty Fees - License Arrangements

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

The Company’s license agreements where it is the licensee 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 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.

As of June 30, 2025, the remaining terms considering available renewal periods range from 1 year to approximately 25 years.

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

5 unchanged sentences

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 stock-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 (loss) earnings.

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

22 unchanged sentences

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.

Noncontrolling interest is adjusted each reporting period for income attributable to the noncontrolling interest.

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, 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.

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

as required by the two-class method when calculating net 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.

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

The Company was not required to record any adjustments, as described above.

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.

1 unchanged sentence

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.

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As of June 30, 2025, the consideration paid to acquire the remaining interest is subject to the final calculation of the purchase price pursuant to the contract.

These adjustments are not expected to be material.

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

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

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.

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 became effective for the Company’s fiscal year ended June 30, 2025 Form 10-K and has been applied on a prospective basis .

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, 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.

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

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 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):

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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.

Effective for the Company – The guidance became effective for the Company’s fiscal year ended June 30, 2025 Form 10-K and has been applied on a retrospective basis and will be applied in interim periods beginning in the Company’s first quarter of fiscal 2026.

Impact on consolidated financial statement s – The Company applied the disclosure requirements as required by the amendments.

See Note 24 – Segment Data and Related Information for further discussion.

Recently Issued Accounting Standards

Measurement of Credit Losses for Accounts Receivable and Contract Assets (Topic 326)

In July 2025, the FASB issued guidance related to the estimation of expected credit losses for current accounts receivable and current contract assets.

The amendment allows entities to elect a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset in the development of a reasonable and supportable forecast as part of estimating expected credit losses.

Entities electing the practical expedient are still required to adjust historical loss information to reflect current conditions to the extent that historical loss information does not reflect current conditions.

An entity that elects to use the practical expedient is required to disclose that fact.

Effective for the Company :

The guidance becomes effective for the Company’s first quarter of fiscal 2027 and is applied prospectively.

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.

Impact on consolidated financial statements :

The Company is currently evaluating the impact that this guidance will have on its accounts receivable balance and consolidated financial statement disclosures.

2024-03 and 2025-01 – Disaggregation of Income Statement Expenses (Subtopic 220-40)

In November 2024 and January 2025, the FASB issued authoritative guidance requiring disclosures, in a tabular format in the notes to the consolidated financial statements, on the disaggregation of relevant expense captions that are included on the face of the consolidated statement of (loss) earnings within continuing operations.

The relevant expense captions are required to be disaggregated into natural expense categories including purchases of inventory, employee compensation, depreciation and intangible asset amortization.

The guidance also requires certain expenses, gains or losses that require disclosure under existing U.S.

GAAP, and that are recorded in a relevant expense caption on the face of the consolidated statement of (loss) earnings, to be presented in the same tabular disclosure.

Qualitative disclosures about any remaining amounts in relevant expense line items are required as well.

In addition, companies are required to disclose the total amount of selling expenses and, on an annual basis, how it defines selling expenses.

Effective for the Company :

The guidance is effective for the Company’s fiscal year ending June 30, 2028 Form 10-K and then in interim periods beginning in the Company’s first quarter of fiscal 2029.

Early adoption is permitted.

The guidance should be applied on a prospective basis;

however, retrospective application is permitted.

Impact on consolidated financial statements :

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

2023-09 – Income Taxes (Topic 740):

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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.

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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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

The guidance also codifies existing SEC rules that require 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.

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

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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.

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

NOTE 3 – INVENTORY AND PROMOTIONAL MERCHANDISE

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Promotional merchandise 164 268

$ 2,175 $ 2,979

Total inventory and promotional merchandise $ 2,074 $ 2,175

THE ESTÉE LAUDER COMPANIES INC.

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Construction in progress 462 500

Total property, plant and equipment, gross

Less accumulated depreciation and amortization ( 4,553 ) ( 4,030 )

Total property, plant and equipment, net

$ 3,172 $ 3,136

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Depreciation and amortization of property, plant and equipment was $ 684 million, $ 663 million and $ 577 million in fiscal 2025, 2024 and 2023, respectively.

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

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

NOTE 5 – ASSET ACQUISITION

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The acquisition of 001 included existing license relationships for certain uses of the brand name, which were modified, terminated or otherwise renegotiated in connection with the transaction, and are discussed separately in Note 15 – Revenue Recognition .

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

The total cost of the asset acquisition is $ 2,578 million, inclusive of approximately $ 28 million of transaction related costs and $ 300 million of deferred consideration payable to the sellers of which $ 150 million was paid in July 2025, and is reflected in Other accrued liabilities as of June 30, 2025, and the remaining $ 150 million is due in July 2026 and reflected in Other noncurrent liabilities in the accompanying consolidated balance sheet as of June 30, 2025.

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

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NOTE 6 – GOODWILL AND OTHER INTANGIBLE ASSETS

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

The Company assigns goodwill at the time of acquisition to a reporting unit, which is one level below the Company's operating segments.

The skin care, makeup, fragrance and hair care product categories are the Company's operating segments.

The following table presents goodwill by product category and the related change in the carrying amount:

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1,525 384 224 353 2,486

Impairment charges ( 291 ) — — — ( 291 )

Translation adjustments, goodwill ( 52 ) — ( 1 ) — ( 53 )

( 38 ) — 5 — ( 33 )

Translation adjustments, accumulated impairments 1 — — — 1

( 342 ) — ( 1 ) — ( 343 )

( 39 ) — 4 — ( 35 )

Balance as of June 30, 2024

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Impairment charges — ( 13 ) — — ( 13 )

( 291 ) — — — ( 291 )

Translation adjustments, goodwill 4 — 7 — 11

( 52 ) — ( 1 ) — ( 53 )

Translation adjustments, accumulated impairments ( 6 ) — — — ( 6 )

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Accumulated impairments ( 435 ) ( 745 ) ( 30 ) — ( 1,210 )

Total goodwill

$ 1,181 $ 371 $ 230 $ 353 $ 2,135

Other Intangible Assets

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.

Other intangible assets primarily include trademarks and customer lists, as well as patents, 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 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.

Definite-lived intangible assets (e.g., customer lists) are amortized on a straight-line basis over their expected period of benefit, approximately 7 years to 14 years.

The costs incurred and expensed by the Company to extend or renew the term of acquired intangible assets during fiscal 2025, 2024 and 2023 were not material to the Company’s results of operations.

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Trademarks 3,123 4,107

Total intangible assets $ 5,183 $ 5,602

Total other intangible assets, net

$ 3,759 $ 5,183

The aggregate amortization expense related to amortizable intangible assets for fiscal 2025, 2024 and 2023 was $ 131 million, $ 144 million and $ 145 million, respectively.

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Fiscal 2025 Impairment Analysis

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

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

During the fiscal 2025 second quarter, the TOM FORD brand experienced lower-than-expected growth within key geographic regions and channels, including in mainland China, Asia travel retail and Hong Kong SAR.

Also during the fiscal 2025 second quarter, the Too Faced reporting unit experienced lower-than-expected results in key geographic regions and channels.

As a result, the Company made revisions to the internal forecasts relating to its TOM FORD brand and Too Faced reporting unit.

Additionally, there were increases in the weighted average cost of capital for both the TOM FORD brand and Too Faced reporting unit as compared to the prior-year annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2024.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company concluded that the changes in circumstances in the TOM FORD brand and Too Faced reporting unit, along with increases in the weighted average cost of capital, triggered the need for interim impairment reviews of the TOM FORD trademark and the Too Faced trademark and goodwill.

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

Accordingly, the Company performed interim impairment tests for the TOM FORD and Too Faced trademarks and Too Faced goodwill as well as a recoverability test for the Too Faced long-lived assets as of December 31, 2024.

The Company concluded that the carrying value of the trademark intangible assets exceeded their estimated fair values, which were determined utilizing the relief-from-royalty method, and recorded an impairment charge of $ 773 million for TOM FORD and $ 75 million for Too Faced.

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

Additionally, as a result of the interim impairment review, the remaining carrying value of Too Faced’s goodwill was not recoverable and the Company recorded an impairment charge of $ 13 million, reducing the carrying value to zero .

The significant assumptions used in the relief-from-royalty method include revenue growth rates and profit margins, terminal values, weighted average cost of capital used to discount future cash flows and royalty rates.

The most significant unobservable input used to estimate the fair value of the TOM FORD and Too Faced trademark intangible assets was the weighted average cost of capital, which was 11.5 % and 14 %, respectively.

Based on the Company’s annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2025, the Company determined that the carrying value of the Dr.Jart+ and Too Faced trademarks exceeded their estimated fair values.

As it relates to Dr.Jart+, a decision was made in the prior year in the reporting unit’s operating plan to exit the travel retail channel.

A revised strategy was implemented that included increased direct investment in other areas of the business, including in mainland China, to support the brand’s future growth.

However, given the lower-than-expected growth within key geographic regions in fiscal 2025, specifically within mainland China and Korea, it was determined that revisions to the internal forecasts were necessary which were finalized and approved in the fiscal 2025 fourth quarter in connection with the brand’s annual planning process, and reflected in the goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2025.

The Too Faced reporting unit continued to experience lower-than-expected results in key geographic regions and channels and as such, it was determined that revisions to the internal forecasts were necessary.

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

For purposes of calculating the estimated fair values of the trademark intangible assets, the Company utilized the relief-from-royalty method and recorded an impairment charge of $ 83 million for Dr.Jart+ and $ 50 million for Too Faced.

The Company then performed a recoverability analysis of the Dr.Jart+ and Too Faced long-lived asset groups and, based on the estimated undiscounted cash flows of the asset groups, concluded that the carrying amount of the long-lived assets for Dr.Jart+ were not recoverable, whereas for Too Faced were recoverable.

For purposes of calculating the impairment charge for the long-lived assets of Dr.Jart+, the asset group was determined to be the reporting unit.

The estimated fair value of the asset group 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 asset group.

As a result, the calculated impairment charge to be allocated to the long-lived assets of Dr.Jart+ was $ 292 million.

The Company concluded that the carrying value of the Dr.Jart+ customer list intangible asset exceeded its estimated fair value, which was determined utilizing the multi-period excess earnings income approach by discounting the incremental after-tax cash flows over multiple periods.

The estimated fair value of all other long-lived assets of Dr.

Jart+ exceeded their carrying values.

As a result, the $ 292 million impairment charge was allocated entirely to the Dr.Jart+ customer list intangible asset.

The significant assumptions used in the calculations of the Dr.Jart+ and Too Faced trademark and Dr.Jart+ customer list impairments include revenue growth rates and profit margins, terminal values, weighted average cost of capital used to discount future cash flows and royalty rates for trademarks.

The most significant unobservable input used to estimate the impairments was the weighted average cost of capital, which was 10.5 % for Dr.Jart+ for both the trademark and customer list impairments, and 13.5 % for Too Faced.

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, 2025 and the remaining trademark, customer list and goodwill carrying values as of June 30, 2025, for the TOM FORD brand and the Too Faced and Dr.Jart+ reporting units, are as follows:

Impairment Charges (1)

Carrying Value

(In millions) Three Months Ended

June 30, 2025

Twelve Months Ended

June 30, 2025

As of June 30, 2025

Brand/Reporting Unit Geographic Region Trademark Customer List

Goodwill Trademark Customer List

Goodwill Trademark (2)

Customer List

TOM FORD The Americas $ — $ — $ — $ 773 $ — $ — $ 1,805 $ — $ —

Too Faced The Americas 50 — — 125 — 13 62 50 —

83 292 — 83 292 — 42 189 —

Total $ 133 $ 292 $ — $ 981 $ 292 $ 13 $ 1,909 $ 239 $ —

(1) The date of the fair value measurement for the TOM FORD trademark intangible asset was December 31, 2024.

The dates of the fair value measurement for the Too Faced trademark intangible asset and Too Faced reporting unit were December 31, 2024 and April 1, 2025.

The date of the fair value measurement for the Dr.

Jart+ trademark intangible asset and asset group was April 1, 2025.

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

(3) The carrying value of the Dr.Jart+ asset group, immediately subsequent to the customer list impairment charge, was equal to its estimated fair value.

The impairment charge related to the TOM FORD trademark intangible asset of $ 773 million was reflected in the fragrance, makeup and other product categories of $ 549 million, $ 170 million and $ 54 million, respectively.

The trademark and goodwill impairment charges related to Too Faced were reflected in the makeup product category.

The trademark and customer list impairment charges related to Dr.Jart+ were reflected in the skin care product category.

The aggregate trademark and customer list impairments are recorded in the Impairment of other intangible assets line item in the accompanying consolidated statements of (loss) earnings.

Fiscal 2024 Impairment Analysis

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.

This revised strategy also includes increased direct investment in other areas of the business, including in mainland 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.

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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 %.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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:

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Carrying Value

(In millions)

Twelve Months Ended

(In millions) Twelve Months Ended

June 30, 2024

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(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.

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

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

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

The estimated 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 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 royalty rates for trademarks.

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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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:

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(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.

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

Fiscal 2022 Impairment Analysis

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

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

The remaining carrying value of the trademark intangible asset was not recoverable and the Company recorded an impairment charge of $ 11 million reducing the carrying value to zero .

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

Accordingly, the Company performed interim impairment tests for the trademarks and a recoverability test for the long-lived assets as of February 28, 2022.

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

For the Dr.Jart+ reporting unit, the Company also 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 $ 205 million.

For the Too Faced and DECIEM reporting units, as the carrying values of the trademarks did not exceed their estimated fair values, which were determined utilizing the relief-from-royalty method to determine discounted projected future cash flows, the Company did not record impairment charges.

The estimated fair values of Too Faced’s and DECIEM's trademarks exceeded their carrying values by 13 % and 3 %, respectively.

For the Too Faced and DECIEM trademark intangible assets, if all other assumptions are held constant, an increase of 100 basis points and 50 basis points, respectively, in the weighted average cost of capital would result in an impairment charge.

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

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

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

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

This determination was made based on updated internal forecasts.

Given the lower-than-expected growth within key geographic regions and channels that continued to be impacted by the spread of COVID-19 variants, the resurgence in cases, regional lockdowns and the potential future impacts relating to the uncertainty of the duration and severity of COVID-19 impacting the financial performance of the brand, the Company made revisions to the internal forecasts relating to the Dr.Jart+ reporting unit.

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 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 $ 25 million.

The Company 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 estimated fair value of the reporting unit was in excess of its carrying value, the Company concluded that the carrying amount of the goodwill was recoverable and did not record a goodwill impairment charge related to the reporting unit.

The 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 units.

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(In millions) Impairment Charges (1)

Carrying Value (2)

Reporting Unit:

Geographic Region Three Months Ended June 30, 2022 Twelve Months Ended June 30, 2022 As of June 30, 2022

GLAMGLOW The Americas $ — $ 11 $ —

Dr.Jart+ Asia/Pacific 25 230 428

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.

NOTE 7 – LEASES

1 unchanged sentence

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.

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(In millions) 2025 2024 2023

10 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

$ 489 $ 463 $ 506

Financing cash flows from finance leases

$ 5 $ 10 $ 15

Right-of-use assets obtained in exchange for new operating lease liabilities $ 466 $ 273 $ 279

Operating cash flows from operating leases

$ 515 $ 489 $ 463

Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 1 $ 34

Right-of-use assets obtained in exchange for new operating lease liabilities $ 537 $ 466 $ 273

Weighted-average remaining lease term – finance leases

6 unchanged sentences

2.8 % 2.8 % 2.5 %

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The total future minimum lease payments, over the remaining lease term, relating to the Company’s operating and finance leases for each of the next five fiscal years and thereafter is as follows:

9 unchanged sentences

Total $ 2,150 $ 31

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Operating lease and finance lease liabilities included in the consolidated balance sheet are as follows:

7 unchanged sentences

NOTE 8 – CHARGES ASSOCIATED WITH RESTRUCTURING AND OTHER ACTIVITIES

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

Net Sales) Cost of Sales Operating Expenses Total

(In millions) Restructuring

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

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

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

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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 restructuring program’s main focus included 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, the Company estimated a net reduction in the range of approximately 1,800 to 3,000 positions globally, which was about 3 - 5 % of its positions including temporary and part-time employees as of June 30, 2023.

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

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

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

After reviewing additional potential initiatives and the progress of previously approved initiatives, on February 3, 2025, the Company committed to the expansion of the PRGP, including an expansion of the restructuring program.

The expansion of the overall PRGP is focused on three key areas.

First, the Company plans to adopt a more competitive approach to procurement, a key pillar of savings, by further consolidating spending and strategically re-evaluating key supplier relationships.

Second, the Company plans to further improve efficiencies within its supply chain network through a zero-waste approach, aiming to improve demand forecasting and innovation planning to minimize excess inventory and product destruction.

Third, the Company is outsourcing select services to proven global partners.

The expanded component of the restructuring program began during the Company’s fiscal 2025 third quarter with all initiatives to be approved by the end of fiscal 2026.

Specific initiatives under the expanded component of the restructuring program are expected to be substantially completed by the end of fiscal 2027.

The focus of the now expanded restructuring program (now, collectively the “Restructuring Program”) includes (i) reorganization and rightsizing of certain areas and (ii) simplification and acceleration of processes, along with the newly added focus on (i) outsourcing of select services and (ii) evolution of go-to-market footprint and selling models.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In connection with the Restructuring Program, as of June 30, 2025 the Company estimates a net reduction in the range of approximately 5,800 to 7,000 positions globally, which is about 9 - 11 % 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:

This net reduction takes into account the elimination of positions after retraining and redeployment of certain employees in select areas.

The Company expects that the Restructuring Program will result in restructuring and other charges totaling between $ 1,200 million and $ 1,600 million, before taxes, consisting of employee-related costs, asset-related costs, contract terminations and other costs associated with implementing these initiatives, which other than the non-cash charges, are expected to result in future cash expenditures funded from cash provided by operations.

Restructuring Program Component of the Profit Recovery and Growth Plan Approvals

Cumulative charges for initiatives approved by the Company in connection with the Restructuring Program as of June 30, 2025 and through August 13, 2025 were:

Net Sales) Cost of Sales Operating Expenses Total

2 unchanged sentences

Total Charges Approved

Cumulative charges through June 30, 2024

$ — $ — $ 109 $ 78 $ 187

July 1, 2024 - July 19, 2024

Cumulative charges through July 19, 2024

4 10 443 36 493

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:

Cumulative charges approved through June 30, 2025

4 10 552 114 680

July 1, 2025 - August 13, 2025 — — 31 36 67

Cumulative charges approved through August 13, 2025 $ 4 $ 10 $ 583 $ 150 $ 747

Included in the above table, cumulative restructuring charges for initiatives approved by the Company in connection with the Restructuring Program as of June 30, 2025 and through August 13, 2025 were:

(In millions) Employee-

2 unchanged sentences

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

419 7 3 14 443

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.

Cumulative charges approved through June 30, 2025

512 14 3 23 552

July 1, 2025 - August 13, 2025 27 4 — — 31

Cumulative charges approved through August 13, 2025 $ 539 $ 18 $ 3 $ 23 $ 583

Specific actions taken since the Restructuring Program inception 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 and research and development functions.

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

• Enabling Function Re-Invention – The Company approved initiatives to reorganize and right-size various corporate functions.

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

• Future of Brand-led Model – The Company approved initiatives to redesign spans and layers in its marketing, creative and other functions within the brand and product category structures to make them leaner, faster and more agile.

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.

• Go-to-Market Operating Model Acceleration – The Company approved initiatives to optimize and right-size the organizational structure within its geographic regions to drive greater efficiency and effectiveness, as well as exit unprofitable brands from specific markets and distribution channels.

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

• Digital Organization Transformation – The Company approved initiatives to begin to reorganize and right-size its technology functions, which support its internal enterprise and commercial capabilities, to create a leaner, faster, more effective and more agile technology 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.

Once the relevant accounting criteria have been met, the Company expects to record cumulative restructuring and other charges of approximately $ 747 million (before tax) in connection with these initiatives, which other than the non-cash charges, are expected to result in future cash expenditures funded from cash provided by operations.

Restructuring Program Restructuring and Other Charges

1 unchanged sentence

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.

Asset-Related Costs – Asset related costs primarily consist of asset write-offs or accelerated depreciation related to long-lived assets (including 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.

5 unchanged sentences

• 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:

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total cumulative charges recorded associated with restructuring and other activities for the Restructuring Program were:

Net Sales) Cost of Sales Operating Expenses Total

2 unchanged sentences

Total Charges

$ — $ — $ 92 $ 23 $ 115

— 9 432 54 495

Cumulative charges through June 30, 2025

$ — $ 9 $ 524 $ 77 $ 610

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions) Employee-

2 unchanged sentences

Restructuring Charges

$ 90 $ 2 $ — $ — $ 92

413 11 3 5 432

Cumulative charges through June 30, 2025

4 unchanged sentences

Terminations Other Exit

$ 90 $ 2 $ — $ — $ 92

Cash payments

Non-Cash asset write-offs

— ( 2 ) — — ( 2 )

Translation and other adjustments

( 2 ) — — — ( 2 )

Balance at June 30, 2024

Charges 413 11 3 5 432

7 unchanged sentences

Accrued restructuring charges at June 30, 2025 relating to the Restructuring Program are expected to result in cash expenditures funded from cash provided by operations of approximately $ 274 million, $ 86 million, and $ 11 million for fiscal 2026, 2027, and 2028, respectively.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Post-COVID Business Acceleration Program

7 unchanged sentences

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.

Inclusive of approvals from inception through June 30, 2022, the PCBA Program resulted in related restructuring and other charges totaling approximately $ 426 million, before taxes, through June 30, 2025.

Specific actions taken during the PCBA Program include:

4 unchanged sentences

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

• 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.

6 unchanged sentences

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• 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.

7 unchanged sentences

Charges Other

Total Charges

Total Charges (Adjustments)

$ 14 $ 2 $ 201 $ 4 $ 221

1 unchanged sentence

27 3 35 12 77

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

( 3 ) ( 1 ) ( 6 ) 1 ( 9 )

Cumulative charges through June 30, 2025

$ 43 $ 10 $ 340 $ 33 $ 426

(In millions) Employee-

5 unchanged sentences

( 4 ) 4 1 — 1

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

( 6 ) 1 ( 1 ) — ( 6 )

Cumulative charges through June 30, 2025

$ 196 $ 122 $ 17 $ 5 $ 340

(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.

29 unchanged sentences

Balance at June 30, 2024 28 — — — 28

Charges ( 6 ) 1 ( 1 ) — ( 6 )

Cash payments ( 17 ) — — — ( 17 )

Non-cash asset write-offs — — — — —

Translation and other adjustments — ( 1 ) 1 — —

Balance at June 30, 2025

$ 5 $ — $ — $ — $ 5

Accrued restructuring charges at June 30, 2025 relating to the PCBA Program are expected to result in cash expenditures funded from cash provided by operations of approximately $ 4 million and $ 1 million for each of fiscal 2026 and 2027, respectively.

8 unchanged sentences

State and local 17 17 8

Total current provision for income taxes

Federal ( 235 ) ( 147 ) ( 105 )

1 unchanged sentence

State and local ( 15 ) ( 7 ) ( 4 )

Total deferred benefit for income taxes

( 396 ) ( 265 ) ( 186 )

Total provision for income taxes

$ 93 $ 363 $ 387

Earnings before income taxes include amounts contributed by the Company’s foreign operations of $ 1,347 million, $ 1,818 million and $ 2,248 million for fiscal 2024, 2023 and 2022, respectively.

(Loss) earnings before income taxes include earnings contributed by the Company’s foreign operations of $ 773 million, $ 1,347 million and $ 1,818 million for fiscal 2025, 2024 and 2023, respectively.

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

On July 4, 2025, new U.S tax legislation was enacted.

Known as the One Big Beautiful Bill Act, this legislation includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act ("TCJA"), modifications to the international tax framework and the restoration of certain business tax provisions.

The legislation has multiple effective dates, with certain provisions becoming effective in fiscal 2026.

The Company is currently evaluating the impact of the new legislation.

On August 16, 2022, the U.S.

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.

The corporate alternative minimum tax did not have an impact on the Company's consolidated financial statements for the years ended June 30, 2025 and June 30, 2024.

On July 20, 2020, the U.S.

2 unchanged sentences

The Company has elected to apply the GILTI high-tax exception beginning with fiscal 2019 through 2024, and intends to make the election for fiscal 2025.

In December 2021, the Organization for Economic Cooperation and Development issued "Pillar Two" Global Anti-Base Erosion model rules for countries to enact into domestic law that would establish a 15% global minimum tax applied on a country-by-country basis for multinational companies.

In certain countries that have enacted legislation incorporating the global minimum tax, it became effective for the Company at the beginning of fiscal 2025.

The estimated tax impact of such legislation has been included in the provision for income taxes for the fiscal year ended June 30, 2025 and was not material.

The Company is continuing to monitor and evaluate the potential impact of newly enacted legislation incorporating the global minimum tax in additional countries.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On August 26, 2024, the U.S.

Tax Court issued a decision in Varian Medical Systems, Inc.

Commissioner.

The decision related to the TCJA deduction for certain deemed foreign dividends otherwise subject to the Transition Tax on unrepatriated earnings of applicable foreign subsidiaries.

Based on the Company's evaluation of the technical merits of this decision, the Company has filed a protective refund claim with the U.S.

Internal Revenue Service in the fiscal 2025 fourth quarter.

At this time the Company believes it is more-likely-than-not that such income tax benefit will not be sustained.

The Company has accrued a $ 73 million estimated tax benefit in the provision for income taxes, offset by an uncertain tax position reserve accrual for the estimated $ 73 million Transition Tax at issue.

As a result, there was no net impact to the provision for income taxes and accompanying consolidated statement of (loss) earnings, or to the accompanying consolidated balance sheet for the year ended June 30, 2025.

A reconciliation of the U.S.

federal statutory income tax rate to the Company’s actual effective tax rate on earnings before income taxes is as follows:

federal statutory income tax rate to the Company’s actual effective tax rate on (loss) earnings before income taxes is as follows:

Year Ended June 30,

4 unchanged sentences

Stock-based compensation arrangements – excess tax expense (benefits), net ( 3.4 ) 3.0 ( 0.8 )

3.0 ( 0.8 ) ( 2.7 )

Taxation of foreign operations ( 10.4 ) 15.9 8.6

3 unchanged sentences

1.2 ( 2.2 ) ( 0.9 )

Changes in valuation allowance ( 16.5 ) — —

Other, net ( 0.8 ) 0.7 ( 0.4 )

1 unchanged sentence

( 8.9 ) % 47.0 % 27.7 %

(1) In fiscal 2025, as a result of the loss before income taxes, all reconciling items that are income tax expenses are presented as decreases to the rate, and all reconciling items that are income tax benefits are presented as increases to the rate.

(2) For fiscal 2025 and fiscal 2024, the reconciling items between the Company's U.S.

1 unchanged sentence

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 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.

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 (loss) earnings.

The Company recognized $ 35 million and $ 23 million of income tax expense for tax deficiencies associated with stock-based compensation for the fiscal years ended June 30, 2025 and 2024, respectively, as compared to $ 11 million of excess tax benefits, net as a reduction to the provision for income taxes for the fiscal year ended June 30, 2023, in the accompanying consolidated statements of (loss) earnings.

The Company has $ 4,466 million of undistributed earnings of foreign subsidiaries as of June 30, 2025.

2 unchanged sentences

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

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

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Significant components of the Company’s deferred income tax assets and liabilities were as follows:

Significant components of the Company’s deferred tax assets and liabilities were as follows:

(In millions) 2025 2024

14 unchanged sentences

ROU assets ( 464 ) ( 422 )

Partnership interest in DECIEM — ( 404 )

Other differences between tax and financial statement values ( 36 ) ( 32 )

4 unchanged sentences

As of June 30, 2025 and 2024, certain subsidiaries had $ 972 million and $ 657 million of foreign net operating loss carryforwards, respectively, the tax effect of which was $ 213 million and $ 170 million, respectively, as well as U.S.

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

federal tax credit carryforwards of $ 172 million and $ 180 million, respectively, and state and local tax credit carryforwards of $ 11 million and $ 8 million, respectively.

With the exception of $ 436 million of net operating losses with an indefinite carryforward period as of June 30, 2025, these net operating loss carryforwards expire at various dates through fiscal 2039.

The tax credit carryforwards will begin to expire in fiscal 2025.

The state and local tax credit carryforwards will begin to expire in fiscal 2029.

The Company has recorded a valuation allowance of $ 454 million and $ 238 million as of June 30, 2025 and 2024, respectively, principally against certain net operating loss carryforwards and tax credit carryforwards.

A valuation allowance has been provided for those deferred tax assets for which, in the opinion of management, it is more-likely-than-not that the deferred tax assets will not be realized.

During fiscal 2025, the Company established a U.S.

valuation allowance of $ 172 million against general foreign tax credit and research and development tax credit carryforwards as it was determined more-likely-than-not that these deferred tax assets would not be realized.

This determination was driven by the Company's weighing of relevant evidence including lower U.S.

taxable income in fiscal 2025 as compared to recent years, reflecting reduced income from its travel retail business, and the resulting uncertainty about the ability to realize the carryforwards prior to expiration.

As of June 30, 2025, 2024 and 2023, the Company had gross unrecognized tax benefits of $ 140 million, $ 65 million, and $ 63 million, respectively.

At June 30, 2025, the total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $ 133 million.

The Company classifies applicable interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.

The total gross accrued interest and penalty expense recorded during fiscal 2024, 2023 and 2022 in the accompanying consolidated statements of earnings was $ 3 million, $ 2 million and $ 4 million, respectively.

The total gross accrued interest and penalties in the accompanying consolidated balance sheets at June 30, 2024 and 2023 was $ 17 million and $ 15 million, respectively.

The increase in the gross amount of unrecognized tax benefits as of June 30, 2025 as compared to June 30, 2024 was primarily attributable to having established an uncertain tax position reserve accrual for the Transition Tax at issue based on the August 26, 2024 U.S.

Tax Court decision in Varian v.

Commissioner, as discussed above.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company classifies applicable interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.

The total gross accrued interest and penalty expense recorded during fiscal 2025, 2024 and 2023 in the accompanying consolidated statements of (loss) earnings was $ 2 million, $ 3 million and $ 2 million, respectively.

The total gross accrued interest and penalties in the accompanying consolidated balance sheets at June 30, 2025 and 2024 was $ 19 million and $ 17 million, respectively.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

(In millions) 2025 2024 2023

Beginning of the year balance of gross unrecognized tax benefits $ 63 $ 61 $ 62

Balance of gross unrecognized tax benefits, beginning of year

$ 65 $ 63 $ 61

Gross amounts of increases as a result of tax positions taken during a prior period 83 4 9

5 unchanged sentences

( 4 ) ( 2 ) ( 2 )

End of year balance of gross unrecognized tax benefits $ 65 $ 63 $ 61

Balance of gross unrecognized tax benefits, end of year

$ 140 $ 65 $ 63

Earnings from the Company’s global operations are subject to tax in various jurisdictions both within and outside the United States.

2 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 fiscal 2025 second quarter, the Company received notification of the formal conclusion of the compliance process with respect to its fiscal 2023 income tax return under the IRS CAP, which had no impact on the Company’s consolidated financial statements for the year ended June 30, 2025.

Subsequent to June 30, 2025, the IRS completed its examination procedures with respect to fiscal 2024 under the IRS CAP.

17 unchanged sentences

Hong Kong 2019 – 2025

2013 – 2018, 2020 – 2025

Italy 2020 – 2025

10 unchanged sentences

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.

Under its 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

Changes in outstanding obligations confirmed as valid under the Company's supplier finance programs are as follows:

(In millions) June 30, 2025

Confirmed obligations outstanding, beginning of year

Invoices confirmed during the year 402

Confirmed invoices paid during the year ( 379 )

Translation adjustments 1

Confirmed obligations outstanding, end of year

Confirmed obligations outstanding as of June 30, 2025 and 2024 are included in Accounts payable in the accompanying consolidated balance sheets.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – OTHER ACCRUED LIABILITIES

Other accrued liabilities consist of the following:

(In millions) 2025 2024

Employee compensation $ 576 $ 546

Accrued employee compensation

Accrued income taxes 282 335

Accrued payroll and other non-income taxes

Accrued restructuring

Accrued sales incentives 321 426

Accrued selling, advertising, marketing, promotion and product development

Deferred revenue 314 327

Payroll and other non-income taxes 333 297

Accrued income taxes 335 222

Other 1,188 1,045

Total other accrued liabilities

$ 3,529 $ 3,404

3 unchanged sentences

The Company’s current and long-term debt and available financing consist of the following:

Debt at June 30 Available financing at

Debt at June 30,

Available financing at

June 30, 2025

17 unchanged sentences

Commercial paper

— 988 — 2,500

Other long-term borrowings 28 28 — —

Other current borrowings 3 4 — 155

Revolving credit facility — — 2,500 —

Revolving credit facilities

7,317 7,771 $ 3,500 $ 2,655

1 unchanged sentence

$ 7,314 $ 7,267

(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.

33 unchanged sentences

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

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.

12 unchanged sentences

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 %.

The treasury lock agreements were settled upon the issuance of the new debt and the Company received a payment of $ 15 million that is being amortized against interest expense over the life of the 2033 Senior Notes.

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.

(6) In May 2003, in anticipation of the issuance of the October 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 %.

As a result of the treasury lock agreements, the debt discount and debt issuance costs, the effective interest rate on the October 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 %.

4 unchanged sentences

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.

(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.

6 unchanged sentences

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

In May 2025, the Company entered into a $ 1,000 million senior unsecured revolving credit facility (the "364-Day Facility").

The 364-Day Facility expires on May 22, 2026.

Up to the equivalent of $ 1,000 million of the 364-Day Facility is available for multi-currency loans.

Interest rates on borrowings under the 364-Day Facility will be based on prevailing market interest rates in accordance with the agreement.

The costs incurred to establish the 364-Day Facility were not material.

The 364-Day Facility has an annual fee of $ 0.7 million, payable quarterly, which can fluctuate based on the Company’s current credit ratings each period.

The 364-Day 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.

At June 30, 2025, no borrowings were outstanding under the 364-Day Facility.

In December 2024, the Company repaid the outstanding principal balance of its $ 500 million, 2024 Senior Notes at maturity with cash from operations.

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”).

3 unchanged sentences

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.

In fiscal 2025, the 2024 Facility's annual fee was $ 1.8 million, payable quarterly, which can fluctuate based on the Company’s credit ratings each period.

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.

3 unchanged sentences

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 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.

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

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 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 %.

During fiscal 2025 and fiscal 2024, there were no amounts outstanding.

Refer to Note 17 – Commitments and Contingencies for the Company’s projected debt service payments as of June 30, 2025 and over the next five fiscal years.

8 unchanged sentences

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.

At June 30, 2025, 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 fallback 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.

1 unchanged sentence

At June 30, 2025, 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.

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 line item as the earnings effect of the hedged transaction in the consolidated statements of (loss) earnings.

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 earnings recognition of excluded components is presented in the same line item as the earnings effect of the hedged transaction in the consolidated statements of (loss) earnings.

Any difference between the changes in the fair value of the excluded components and amounts recognized in (loss) 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, 2025 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.

The accumulated net gain (loss) on derivative instruments designated as fair value hedges in AOCI was $ 7 million and $( 7 ) million as of June 30, 2025 and 2024, 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 Company enters into foreign currency forward 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.

The foreign currency forward contracts entered into to hedge anticipated transactions and receivables and payables denominated in foreign currencies have been designated as cash flow hedges and have varying maturities through the end of December 2026.

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

At June 30, 2025, the Company had cash flow hedges outstanding with a notional amount totaling $ 1,517 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.

1 unchanged sentence

As of June 30, 2025, the Company’s foreign currency cash flow hedges were highly effective.

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.

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.

The estimated net loss on the Company’s derivative instruments designated as cash flow hedges as of June 30, 2025 that is expected to be reclassified from AOCI into earnings, net of tax, within the next twelve months is $ 29 million.

The accumulated net (loss) gain on derivative instruments designated as cash flow hedges in AOCI was $( 13 ) million and $ 75 million as of June 30, 2025 and 2024, 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.

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

Forward points and cross-currency basis spreads, respectively, are excluded from the effectiveness assessment and are recognized under a systematic and rational method over the life of the hedging instrument in Selling, general and administrative expenses.

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.

The net investment hedge contracts have varying maturities through the end of November 2029.

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.

At June 30, 2025, the Company had net investment hedges outstanding with notional amounts totaling $ 1,055 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.

12 unchanged sentences

Derivatives Designated as Hedging Instruments:

Foreign currency cash flow hedges (2)

Foreign currency forward contracts (2)

Prepaid expenses and other current assets;

$ 34 $ 56 Other accrued liabilities $ 4 $ 16

Other assets $ 7 $ 49 Other accrued liabilities $ 82 $ 4

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 — — Other accrued liabilities 145 150

Other assets 50 80 Other accrued liabilities 15 —

Interest rate contracts

— — Other accrued liabilities 104 145

Total Derivatives Designated as Hedging Instruments 57 129 201 149

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.

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

There were no amounts classified in Other assets at June 30, 2025.

(3) Included in the asset derivatives for the cross-currency swap contracts at June 30, 2025 and June 30, 2024 is approximately $ 40 million and $ 70 million, respectively, classified within Other assets in the accompanying consolidated balance sheets.

THE ESTÉE LAUDER COMPANIES INC.

5 unchanged sentences

Reclassified from AOCI into

(Loss) Earnings (1)

June 30 from AOCI into June 30

(In millions) 2024 2023 Earnings 2024 2023

(In millions) 2025 2024 (Loss) Earnings

Derivatives in Cash Flow Hedging Relationships:

Foreign currency forward contracts $ ( 52 ) $ 47 Net sales $ 35 $ 50

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

Interest rate contracts

— — Interest expense 2 —

Total cash flow hedges

( 52 ) 47 37 50

Derivatives in Net Investment Hedging Relationships (2) :

Foreign currency forward contracts (3)

Cross-currency swap contracts (4)

Total net investment hedges ( 78 ) 1 — —

Total derivatives $ ( 130 ) $ 48 $ 37 $ 50

(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.

(1) The amount reclassified into the accompanying consolidated statements of (loss) 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) Included within translation adjustments as a component of AOCI on the Company’s consolidated balance sheets.

Amount of Gain (Loss) Recognized in Earnings on Derivatives

(3) During fiscal 2025 and 2024 the gain recognized in the accompanying consolidated statements of (loss) earnings from foreign currency forward contracts related to the amount excluded from effectiveness testing was $ 21 million and $ 17 million, respectively.

(4) During fiscal 2025 the gain recognized in the accompanying consolidated statements of (loss) earnings from cross-currency swap contracts related to the amount excluded from effectiveness testing was $ 7 million.

Amount of Gain (Loss) Recognized in (Loss) Earnings on Derivatives

Location of Gain (Loss) June 30

(In millions) Recognized in Earnings on Derivatives 2024 2023

(In millions) Recognized in (Loss) Earnings on Derivatives

Derivatives in Fair Value Hedging

2 unchanged sentences

Selling, general and administrative $ ( 45 ) $ 44

Interest rate swap contracts (2)

Interest rate contracts (2)

Interest expense $ 42 $ 5

(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 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 gain recognized in the accompanying consolidated statements of (loss) earnings from cross-currency swap contracts related to the amount excluded from effectiveness testing in fiscal 2025 and 2024 was $ 19 million.

(2) Changes in the fair value of the interest rate contracts 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:

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

(In millions)

8 unchanged sentences

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

Total amounts of income and expense line items presented in the consolidated statements of earnings in which the effects of fair value and cash flow hedges are recorded $ 15,608 $ 9,621 $ 378 $ 15,910 $ 9,575 $ 255

Total amounts of income and expense line items presented in the consolidated statements of (loss) earnings in which the effects of fair value and cash flow hedges are recorded

$ 14,326 $ 9,456 $ 357 $ 15,608 $ 9,621 $ 378

The effects of fair value and cash flow hedging relationships:

5 unchanged sentences

Derivatives designated as hedging instruments N/A ( 45 ) N/A N/A 44 N/A

Loss on cash flow hedge relationships – interest rate contracts:

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

Gain on cash flow hedge relationships – interest rate contracts:

Amount of gain reclassified from AOCI

N/A N/A 2 N/A N/A —

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

Amount of gain reclassified from AOCI into earnings 50 N/A N/A 71 N/A N/A

Amount of gain reclassified from AOCI

35 N/A N/A 50 N/A N/A

N/A (Not applicable)

2 unchanged sentences

(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

Total amounts of income and expense line items presented in the consolidated statements of (loss) earnings in which the effects of fair value and cash flow hedges are recorded

$ 15,910 $ 9,575 $ 255

The effects of fair value and cash flow hedging relationships:

6 unchanged sentences

Loss on cash flow hedge relationships – interest rate contracts:

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

Amount of loss reclassified from AOCI

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

Amount of gain reclassified from AOCI

N/A (Not applicable)

1 unchanged sentence

Amount of Gain (Loss)

Recognized in Earnings on Derivatives

Recognized in (Loss) Earnings on Derivatives

Location of Gain (Loss) June 30,

(In millions) Recognized in Earnings on Derivatives 2024 2023

(In millions) Recognized in (Loss) Earnings on Derivatives

Derivatives Not Designated as Hedging Instruments:

6 unchanged sentences

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

As of June 30, 2024 As of June 30, 2023

As of June 30, 2025

As of June 30, 2024

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

Derivative Financial Contracts

Derivative Financial Instruments

Derivative assets $ 82 $ ( 60 ) $ 22 $ 148 $ ( 49 ) $ 99

Derivative liabilities ( 216 ) 60 ( 156 ) ( 166 ) 49 ( 117 )

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

Total derivatives

$ ( 134 ) $ — $ ( 134 ) $ ( 18 ) $ — $ ( 18 )

NOTE 14 – FAIR VALUE MEASUREMENTS

18 unchanged sentences

Foreign currency forward contracts $ — $ 97 $ — $ 97

Interest rate-related derivatives — 145 — 145

Interest rate contracts

Cross-currency swap contracts — 15 — 15

Total $ — $ 216 $ — $ 216

6 unchanged sentences

Foreign currency forward contracts $ — $ 21 $ — $ 21

Interest rate-related derivatives — 150 — 150

DECIEM stock options — — 99 99

Interest rate contracts

Total $ — $ 166 $ — $ 166

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The estimated fair values of the Company’s financial instruments not measured at fair value on a recurring basis are as follows:

(In millions) Carrying

Value Carrying

Nonderivatives

Cash and cash equivalents $ 3,395 $ 3,395 $ 4,029 $ 4,029

Current and long-term debt $ 7,317 $ 6,794 $ 7,771 $ 7,174

DECIEM stock options — — 99 99

Deferred consideration payable $ 322 $ 323 $ 341 $ 340

Cross-currency swap contracts - asset

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

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:

4 unchanged sentences

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.

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

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

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

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

Interest rate contracts – 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 SOFR forward curves, were obtained from independent pricing services.

6 unchanged sentences

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

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 in May 2021.

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:

(In millions) Fair Value

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

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 $ —

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.

In connection with its interim and annual impairment assessment of goodwill and other indefinite-lived intangible assets and the Dr.Jart+ other intangible asset impairment, 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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 – REVENUE RECOGNITION

For further information on the Company's policies relating to revenue recognition and accounts receivable see Note 2 – Summary of Significant Accounting Policies.

Disaggregation of net sales by the Company's geographic regions are as follows:

Year Ended June 30,

(In millions) 2025 2024 2023

The Americas $ 4,411 $ 4,581 $ 4,518

Europe, the Middle East & Africa 5,375 6,140 6,225

Asia/Pacific 4,537 4,888 5,194

14,323 15,609 15,937

Returns associated with restructuring and other activities 3 ( 1 ) ( 27 )

Net sales $ 14,326 $ 15,608 $ 15,910

(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.

Accounts Receivable

3 unchanged sentences

(In millions) 2025 2024

Allowance for credit losses, beginning of period $ 16 $ 10

Allowance for credit losses, beginning of year

Provision (adjustment) for expected credit losses 11 ( 4 )

Write-offs, net & other 1 2

Allowance for credit losses, end of period $ 14 $ 16

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

Allowance for credit losses, end of year

The remaining balance of the allowance for doubtful accounts and customer deductions of $ 12 million as of June 30, 2025 and June 30, 2024, relates to non-credit losses, which are primarily due to customer deductions.

Deferred Revenue

1 unchanged sentence

(In millions) 2025 2024

Deferred revenue, beginning of period $ 572 $ 362

Deferred revenue, beginning of year

Revenue recognized that was included in the deferred revenue balance at the beginning of the period ( 288 ) ( 316 )

1 unchanged sentence

Other 4 ( 12 )

Deferred revenue, end of period $ 560 $ 572

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.

Deferred revenue, end of year

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Transaction Price Allocated to the Remaining Performance Obligations

4 unchanged sentences

(In millions) Minimum Remaining Royalties

Fiscal 2025 $ 28

Fiscal 2026 $ 29

Fiscal 2027 $ 30

Fiscal 2028 $ 32

Fiscal 2029 $ 33

Thereafter 133

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

THE ESTÉE LAUDER COMPANIES INC.

5 unchanged sentences

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

The Company also maintains post-retirement benefit plans that provide certain medical and dental benefits to eligible employees.

Retirement Growth Account Plan (U.S.)

1 unchanged sentence

The Company seeks to maintain appropriate funded percentages.

For contributions, the Company would seek to contribute an amount or amounts that would not be less than the minimum required by the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, and subsequent pension legislation, and would not be more than the maximum amount deductible for income tax purposes.

For contributions, the Company seeks to contribute an amount or amounts that would not be less than the minimum required by the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, and subsequent pension legislation, and would not be more than the maximum amount deductible for income tax purposes.

Restoration Plan (U.S.)

14 unchanged sentences

Plan Summaries

The components of the above-mentioned plans as of and for the years ended June 30 are summarized as follows:

The components of the above-mentioned plans as of and for the years ended June 30, 2025 and 2024 are summarized as follows:

Pension Plans Other than

3 unchanged sentences

Change in benefit obligation:

Benefit obligation at beginning of year $ 912 $ 922 $ 522 $ 562 $ 176 $ 177

Benefit obligation, beginning of year

$ 941 $ 912 $ 541 $ 522 $ 144 $ 176

Service cost 35 35 28 26 1 2

1 unchanged sentence

Plan participant contributions — — 8 8 1 1

Actuarial loss (gain) ( 3 ) ( 30 ) ( 1 ) ( 51 ) ( 6 ) 4

Actuarial (gain) loss

( 8 ) ( 3 ) 12 ( 1 ) 2 ( 6 )

Foreign currency exchange rate impact — — 36 — ( 1 ) —

1 unchanged sentence

Plan amendments — — — — — ( 25 )

Settlements — — ( 2 ) ( 4 ) — —

Settlements and curtailments

( 1 ) — ( 20 ) ( 2 ) 2 —

Special termination benefits — — 3 1 — —

Benefit obligation at end of year $ 941 $ 912 $ 541 $ 522 $ 144 $ 176

Benefit obligation, end of year

$ 964 $ 941 $ 595 $ 541 $ 143 $ 144

Change in plan assets:

Fair value of plan assets at beginning of year $ 753 $ 838 $ 541 $ 579 $ 2 $ 14

Fair value of plan assets, beginning of year

$ 801 $ 753 $ 567 $ 541 $ — $ 2

Actual return on plan assets 35 14 16 29 — —

4 unchanged sentences

Benefits, expenses, taxes and premiums paid from plan assets ( 54 ) ( 49 ) ( 31 ) ( 32 ) ( 14 ) ( 12 )

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

Fair value of plan assets, end of year

$ 826 $ 801 $ 611 $ 567 $ — $ —

Funded status $ ( 138 ) $ ( 140 ) $ 16 $ 26 $ ( 143 ) $ ( 144 )

6 unchanged sentences

Net amount recognized $ 118 $ 129 $ 38 $ 21 $ ( 153 ) $ ( 165 )

For fiscal 2023, the $ 30 million actuarial gain relating to the U.S.

pension plans was primarily due to the increase in the weighted average discount rate relating to the Retirement Growth Account Plan and the Restoration Plan from 4.5 % to 5.3 % and 4.3 % to 5.2 %, respectively.

For fiscal 2023, the $ 51 million actuarial gain relating to the International pension plans was primarily due to the increase in the weighted average discount rate from 2.8 % to 3.7 %.

THE ESTÉE LAUDER COMPANIES INC.

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5.00 – 10.75 %

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

4.50 – 9.75 %

Expected return on assets 6.25 % 6.25 % 6.25 % 2.75 – 10.00 %

2.25 – 9.00 %

1.25 – 9.00 %

N/A 6.25 % 6.25 %

Rate of compensation increase 2.50 – 8.00 %

2 unchanged sentences

1.50 – 5.00 %

1.75 – 5.00 %

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

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Expected return on assets

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

6.25 % 6.25 % 6.25 % 4.13 % 4.06 % 2.95 % N/A 6.25 % 6.25 %

Rate of compensation increase 2.50 – 8.00 %

1 unchanged sentence

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.

3.00 % 3.08 % 2.96 % N/A N/A N/A

THE ESTÉE LAUDER COMPANIES INC.

3 unchanged sentences

The Company used an above-mean yield curve which represents an estimate of the effective settlement rate of the obligation, and the timing and amount of cash flows related to the bonds included in this portfolio are expected to match the estimated defined benefit payment streams of the Company’s domestic plans.

For the Company’s international plans, the discount rate in a particular country was principally determined based on a yield curve constructed from high quality corporate bonds in each country, with the resulting portfolio having a duration matching that particular plan.

For the Company’s international plans, the discount rate in a particular country was principally determined based on a yield curve constructed from high quality corporate bonds in that respective country, with the resulting portfolio having a duration matching that particular plan.

In determining the long-term rate of return for a plan, the Company considers the historical rates of return, the nature of the plan’s investments and an expectation for the plan’s investment strategies.

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Net actuarial losses (gains), beginning of year $ 268 $ ( 4 ) $ 1 $ 265

Actuarial losses (gains) recognized

37 ( 4 ) ( 6 ) 27

Actuarial losses recognized

Amortization and settlements included in net periodic benefit cost ( 20 ) 5 — ( 15 )

Translation adjustments — — 1 1

Net actuarial losses (gains), end of year 268 ( 4 ) 1 265

Net actuarial losses, end of year

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

Amortization included in net periodic benefit cost — — 6 6

Prior service cost recognized

— — ( 25 ) ( 25 )

Curtailments included in net periodic benefit cost

Net prior service cost, end of year 1 ( 1 ) ( 14 ) ( 14 )

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Expected employer contributions for year ending June 30, 2026

Expected benefit payments for year ending June 30,

$ 46 $ 32 $ 9

Expected benefit payments for year ending June 30,

2027 82 36 10

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Other 11 % 24 %

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

Cash and Cash Equivalents – Cash and all highly-liquid securities with original maturities of three months or less are classified as cash and cash equivalents, primarily consisting of cash deposits in interest bearing accounts, time deposits and money market funds.

These assets are classified within Level 1 of the valuation hierarchy.

Short-term investment funds – The fair values are determined using the Net Asset Value (“NAV”) provided by the administrator of the fund when the Company has the ability to redeem the assets at the measurement date.

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

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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.

The fair values for non-publicly traded funds are determined using the NAV provided by the administrator of the fund when the Company has the ability to redeem the assets at the measurement date.

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

When the Company is utilizing the NAV as a practical expedient those investments are not included in the valuation hierarchy.

These investments have monthly redemption frequencies with redemption notice periods ranging from 10 to 30 days.

There are no unfunded commitments related to these investments.

Insurance contracts – The fair values are based on negotiated value and the underlying investments held in separate account portfolios, as well as the consideration of the creditworthiness of the issuer.

The underlying investments are primarily government, asset-backed and fixed income securities.

Insurance contracts are generally classified as Level 3 as there are no quoted prices or other observable inputs for pricing.

Interests in limited partnerships and hedge fund investments – The fair values are determined using the NAV provided by the administrator as a practical expedient, and therefore these investments are not included in the valuation hierarchy.

These investments have monthly and quarterly redemption frequencies with redemption notice periods ranging from 30 to 90 days.

Unfunded commitments related to these investments are de minimis.

The following table presents the fair values of the Company’s pension and post-retirement plan assets by asset category as of June 30, 2025:

(In millions) Level 1 Level 2 Level 3 Assets

Net Asset Value

Cash and cash equivalents $ 2 $ — $ — $ — $ 2

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(In millions) Level 1 Level 2 Level 3 Assets

Net Asset Value

Cash and cash equivalents $ 2 $ — $ — $ — $ 2

5 unchanged sentences

Total $ 440 $ 670 $ 14 $ 244 $ 1,368

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the changes in Level 3 plan assets:

7 unchanged sentences

Balance at end of year $ 18 $ 14

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

Cash and cash equivalents – Cash and all highly-liquid securities with original maturities of three months or less are classified as cash and cash equivalents, primarily consisting of cash deposits in interest bearing accounts, time deposits and money market funds.

These assets are classified within Level 1 of the valuation hierarchy.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

These investments are classified within Level 1 of the valuation hierarchy.

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

The fair values for non-publicly traded funds are determined using the NAV provided by the administrator of the fund when the Company has the ability to redeem the assets at the measurement date.

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

When the Company is utilizing the NAV as a practical expedient those investments are not included in the valuation hierarchy.

These investments have monthly redemption frequencies with redemption notice periods ranging from 10 to 14 days.

There are no unfunded commitments related to these investments.

The underlying investments are primarily government, asset-backed and fixed income securities.

Insurance contracts are generally classified as Level 3 as there are no quoted prices or other observable inputs for pricing.

These investments have monthly and quarterly redemption frequencies with redemption notice periods ranging from 30 to 90 days.

Unfunded commitments related to these investments are de minimis.

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

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(2) Unconditional purchase obligations primarily include:

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

inventory commitments, information technology contract commitments, accrued restructuring, deferred consideration payable, 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, 2025, without consideration for potential renewal periods.

6 unchanged sentences

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, securities, 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 above, as well as the Securities Class Action and Derivative Matters referred to below, are not material to the Company’s consolidated financial statements.

The Company establishes accruals for loss contingencies when it has determined that a loss is probable and that the amount of loss, or range of loss, can be reasonably estimated.

Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely on estimates and assumptions including timing of related payments.

Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances.

The Company also determines estimates of reasonably possible losses or ranges of reasonably possible losses in excess of related accrued liabilities, if any, when it has determined that a loss is reasonably possible, and it is able to determine such estimates.

Legal defense costs are recognized as incurred when the legal services are provided.

Refer below for the assessment of loss contingencies associated with the Company's Securities Class Action and Derivative Matters and Cosmetic Talcum Powder Matters.

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

Reasonably possible losses in addition to the amounts accrued for the Company's remaining litigation and legal proceedings are not expected to be material to the Company's consolidated financial statements.

However, management’s assessment of the Company’s current litigation and other legal proceedings, including the Securities Class Action and Derivative Matters and Cosmetic Talcum Powder Matters, 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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO 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 December 7, 2023 and January 22, 2024, the Company and its then 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.

On March 31, 2025, the Court denied defendants' motion to dismiss.

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.

On February 1, 2024 and March 15, 2024, stockholder derivative action complaints were filed against certain of the Company’s officers as of those dates, 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.

Subsequently, the Company's Board of Directors ("the Board") received stockholder litigation demands, requesting, among other things, that the Board 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 the subject of the voluntarily dismissed stockholder derivative actions complaints) described above.

A committee of the Board has been formed to review the stockholder demands and make recommendations, as appropriate in its discretion, to the Board.

On May 8, 2025, two additional stockholder derivative action complaints were filed in the United States District Court for the Southern District of New York against certain of the Company’s officers and directors alleging breach of fiduciary duty and unjust enrichment from the sale of stock by certain individual defendants during the time period surrounding the allegations of false and misleading statements in the purported securities class action described above.

Then, on June 23, 2025, another stockholder derivative action complaint was filed in the Supreme Court of the State of New York in Kings County against certain of the Company’s officers and directors, also alleging breach of fiduciary duty and unjust enrichment as well as claims of waste, gross mismanagement, unjust enrichment, and insider trading.

The Company believes that it is not possible at this time to reasonably assess the outcome of these matters or to estimate the loss or range of losses, if any, as the matters are in their early stages.

Cosmetic Talcum Powder Matters

2 unchanged sentences

As of June 30, 2025, there were 84 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 273 cases as of June 30, 2024.

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.

During the year ended June 30, 2025, 76 new cases were filed and 265 cases were resolved by settlement or voluntary dismissal (including pursuant to the cases that were settled in the talcum litigation settlement agreements described below).

In view of the number of cases pending against the Company at June 30, 2024 as well as the evolution of the litigation landscape and expectations regarding future claims at that time, the Company took action from the end of August 2024 through October 2024 to mitigate its future exposure.

During the period, the Company reached agreements with certain plaintiff law firms (collectively, the “talcum litigation settlement agreements”) for:

(i) the resolution of over 200 pending cosmetic talcum powder matters handled by those firms as well as (ii) a process for resolving potential future cosmetic talcum powder claims expected to be brought on behalf of plaintiffs by those firms from January 1, 2025 through December 31, 2029, with annual capped amounts per year for each participating law firm.

To account for the talcum litigation settlement agreements, the Company recorded a charge of $ 159 million during the fiscal 2025 first quarter for the amount agreed to settle the current and potential future claims (amounts recorded for potential future claims is based on the best estimate of the probable loss and a reasonably possible loss beyond the amounts recorded is not expected to be material).

As of June 30, 2025, $ 22 million is recorded in Other accrued liabilities and $ 85 million is recorded in Other noncurrent liabilities in the accompanying consolidated balance sheet related to the talcum litigation settlement agreements.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There are and could be other plaintiff law firms outside of those included in the talcum litigation settlement agreements that bring claims against the Company.

The value of other settlements outside of the talcum litigation settlement agreements, either individually or in the aggregate, for the years ended June 30, 2025, 2024 and 2023 were not material.

Given the inherent uncertainties of litigation, it is not possible to predict the outcome of all individual cases pending against the Company or potential unasserted claims, and therefore a specific estimate and associated provision is made, as needed, for a small number of individual cases that have advanced to the later stages of legal proceedings.

For the remaining filed cases, the Company records an estimate of exposure loss on an aggregated and ongoing basis, which takes into account the historical outcomes of cases the Company has resolved to date.

Any adverse outcomes, either in an individual case or in the aggregate, could be material.

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.

The amounts recorded during the years ended June 30, 2025, 2024 and 2023 for such litigation, outside of the talcum litigation settlement agreements, 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 for cosmetic talcum matters.

Amounts received to date have not been material.

NOTE 18 – COMMON STOCK

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( 1,220.7 ) —

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

Stock-based compensation 1,785.1 —

1 unchanged sentence

Acquisition of treasury stock (1)

( 1,220.7 ) —

Stock-based compensation 1,385.2 —

3 unchanged sentences

Balance at June 30, 2025 234,224.8 125,542.0

(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

(1) In fiscal 2023, this amount represents 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 and 2025, 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 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, 2025, 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.

Beginning in December 2022, the Company suspended the repurchase of shares of its Class A Common Stock under its publicly announced program.

The Company may resume repurchases in the future.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2025:

5 unchanged sentences

On August 19, 2025, a dividend was declared in the amount of $ .35 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 dividend is payable in cash on September 16, 2025 to stockholders of record at the close of business on September 2, 2025.

NOTE 19 – STOCK PROGRAMS

As of June 30, 2025, the Company has two active equity compensation plans which include the Amended and Restated Fiscal 2002 Share Incentive Plan (the “Fiscal 2002 Plan”) and the Amended and Restated Non-Employee Director Share Incentive Plan (collectively, the “Plans”).

These Plans currently provide for the issuance of approximately 88.8 million shares of Class A Common Stock, which consist of shares originally provided for and shares transferred to the Fiscal 2002 Plan from other inactive plans and employment agreements, to be granted in the form of stock-based awards to key employees and non-employee directors of the Company.

During fiscal 2025, the Company amended the Fiscal 2002 Plan, which included an increase in the aggregate number of shares of Class A common stock available for issuance under the Plan.

These Plans currently provide for the issuance of approximately 100.8 million shares of Class A Common Stock, which consist of shares cumulatively provided for and shares transferred to the Fiscal 2002 Plan from other inactive plans and employment agreements, to be granted in the form of stock-based awards to key employees and non-employee directors of the Company.

As of June 30, 2025, approximately 15.3 million shares of Class A Common Stock were reserved and available to be granted pursuant to these Plans.

58 unchanged sentences

1.2 million in fiscal 2026, 1.2 million in fiscal 2027 and 1.0 million in fiscal 2028.

Vesting of RSUs granted is generally subject to the continued employment or the retirement of the grantees.

Vesting of RSUs is generally subject to the continued employment or the retirement of the grantees.

The RSUs are generally accompanied by dividend equivalent rights, payable upon settlement of the RSUs either in cash or shares (based on the terms of the particular award) and, as such, were generally valued at the closing market price of the Company’s Class A Common Stock on the date of grant.

13 unchanged sentences

During fiscal 2025, the Company granted PSUs with a target payout of approximately 0.4 million shares of Class A Common Stock with a weighted-average grant date fair value per share of $ 92.02 , which will be settled in stock subject to the achievement of the Company’s net sales, diluted net earnings per common share and return on invested capital goals for the three fiscal years ending June 30, 2027, all subject to continued employment or the retirement of the grantees.

For PSUs granted, no settlement will occur for results below the applicable minimum threshold.

For PSUs, no settlement will occur for results below the applicable minimum threshold.

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 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, 2025 and activity during the fiscal year then ended:

5 unchanged sentences

Vested and issued (1)

( 44.8 ) 218.12

Forfeited ( 117.7 ) 286.65

Nonvested at June 30, 2025

(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.

(1) The total fair value of PSUs vested and issued during fiscal 2024 and 2023 was $ 7 million and $ 67 million, respectively.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-term Performance Share Units

During September 2015, the Company granted PSUs to the Company's Chief Executive Officer (“CEO”) with an aggregate target payout of 387,848 shares (in three tranches of approximately 129,283 each) of the Company’s Class A Common Stock, generally subject to continued employment through the end of relative performance periods, which ended June 30, 2018, 2019, and 2020.

During September 2015, the Company granted PSUs to the Company's then Chief Executive Officer (“CEO”) with an aggregate target payout of 387,848 shares (in three tranches of approximately 129,283 each) of the Company’s Class A Common Stock, generally subject to continued employment through the end of relative performance periods, which ended June 30, 2018, 2019, and 2020.

Since the Company achieved positive Net Earnings, as defined in the PSU award agreement, for the fiscal year ended June 30, 2016, performance and vesting of each tranche was based on the Company achieving positive Cumulative Operating Income, as defined in the PSU award agreement, during the relative performance period.

Payment with respect to a tranche was made on the third anniversary of the last day of the respective performance period.

The PSUs are accompanied by dividend equivalent rights that was payable in cash at the same time as the payment of shares of Class A Common Stock.

The PSUs are accompanied by dividend equivalent rights that were payable in cash at the same time as the payment of shares of Class A Common Stock.

The grant date fair value of these PSUs of $ 30 million was estimated using the closing stock price of the Company’s Class A Common Stock as of September 4, 2015, the date of grant.

As of June 30, 2023, all 387,848 shares of the Company’s Class A Common Stock were issued, and the related dividends paid, in accordance with the terms of the grant, related to the performance periods ended June 30, 2018, 2019, and 2020.

In February 2018, the Company granted to the Company's CEO PSUs with an aggregate payout of 195,940 shares (in two tranches of 97,970 shares each) of the Company’s Class A Common Stock, generally subject to continued employment through the end of the respective performance periods ending June 30, 2021 and 2022.

No portion of the award will generally vest unless the Company has achieved positive Cumulative Operating Income, as defined in the performance share unit award agreement, during the relevant performance period.

Settlement, if any, with respect to both tranches will be made on September 3, 2024.

The PSUs are accompanied by dividend equivalent rights that will be payable in cash at the same time as any payment of shares of Class A Common Stock.

In February 2018, the Company granted to the Company's then CEO PSUs with an aggregate payout of 195,940 shares (in two tranches of 97,970 shares each) of the Company’s Class A Common Stock, generally subject to continued employment through the end of the respective performance periods, which ended June 30, 2021 and 2022.

No portion of the award would generally vest unless the Company has achieved positive Cumulative Operating Income, as defined in the performance share unit award agreement, during the relevant performance period.

Settlement, if any, with respect to both tranches would be made on September 3, 2024.

The PSUs are accompanied by dividend equivalent rights that were payable in cash at the same time as any payment of shares of Class A Common Stock.

The grant date fair value of these PSUs of $ 27 million was estimated using the closing stock price of the Company’s Class A Common Stock as of the date of grant.

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.

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.

Generally, no portion of this award will vest unless the Company has achieved positive Cumulative Operating Income, as defined in the performance share unit award agreement, during the relevant performance period, and delivery of shares of the Company’s Class A Common Stock, if any, will be made on September 2, 2025.

On September 3, 2024, since the Company achieved positive Cumulative Operating Income, as defined in the PSU award agreement, and since the executive completed the requisite service, the Company issued 195,940 shares of the Company’s Class A Common Stock to its then Chief Executive Officer in accordance with the terms of these PSUs.

At the time of issuance, the total fair value of shares granted was $ 18 million.

In March 2021, the Company granted to the Company’s then 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.

The PSUs are accompanied by dividend equivalent rights that will be payable in cash at the same time as any delivery of shares of the Company's Class A Common Stock.

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

Since the Company achieved positive Cumulative Operating Income, as defined in the PSU award agreement, and since the then CEO completed the requisite service, 68,578 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 2, 2025.

Long-term Price-Vested Units

In March 2021, the Company granted to the Company’s CEO PVUs with an aggregate payout of 85,927 shares, divided into three tranches, of the Company's Class A Common Stock, to incentivize him to continue serving through at least June 30, 2024.

In March 2021, the Company granted to the Company’s then CEO PVUs with an aggregate payout of 85,927 shares, divided into three tranches, of the Company's Class A Common Stock, to incentivize him to continue serving through at least June 30, 2024.

Generally, no portion of this award will vest unless the Company has achieved positive Cumulative Operating Income, as defined in the price-vested unit award agreement, during the relevant performance period.

In addition, the vesting of each tranche is contingent upon the Company’s achievement of the respective stock price goal, which means that the average closing price per share of the Company’s Class A Common Stock traded on the New York Stock Exchange be at or above the applicable stock price goal (noted in the table below) for 20 consecutive trading days during the applicable performance period.

The PVUs are accompanied by dividend equivalent rights that will be payable in cash at the same time as any delivery of shares of the Company's Class A Common Stock.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The number of shares subject to each tranche of the price-vested unit award, as well as the stock price goals, service periods, performance periods and share delivery dates for each tranche are as follows:

5 unchanged sentences

Total shares 85,927

The Stock Price Goals (per Share) were all achieved during fiscal 2022 but delivery of the shares are still subject to achievement of the Cumulative Operating Income goal and other terms and conditions in accordance with the terms of the award agreement .

Generally, delivery of shares of the Company’s Class A Common Stock, if any, will be made on September 2, 2025.

The PVUs are accompanied by dividend equivalent rights that will be payable in cash at the same time as any delivery of shares of the Company's Class A Common Stock.

The aggregate grant date fair value of the PVUs of approximately $ 20 million was estimated using the Monte Carlo Method, which requires certain assumptions.

4 unchanged sentences

Expected term 3.3 years

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Stock Price Goals (per Share) were all achieved during fiscal 2022 and since the Company achieved positive Cumulative Operating Income as of June 30, 2025, as defined in the award agreement, and since the CEO completed the requisite service, 85,927 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 2, 2025.

The Company grants share units to certain non-employee directors under the Amended and Restated Non-Employee Director Share Incentive Plan.

11 unchanged sentences

(1) The total intrinsic value of share units converted during fiscal 2025, 2024 and 2023 was $ 1.6 million, $ 1.5 million, and $ 4.1 million, respectively.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 $ 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.

The Company recorded $ 3 million, $ 13 million and $ 8 million as compensation income, net to reflect additional deferrals and the change in the market value for fiscal 2025, 2024 and 2023, respectively.

DECIEM Stock Options

3 unchanged sentences

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, 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.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of the DECIEM stock option program as of June 30, 2024 and changes during the fiscal year then ended:

(Shares in thousands) Shares Weighted-

Price Per Share

Outstanding at June 30, 2023

Granted at fair value — —

Exercised 94.1 56.65

Forfeited — —

Outstanding at June 30, 2024

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.

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

Operating leverage adjustment 0.45 0.45

Net sales discount rate 7.80 % 6.00 %

EBITDA discount rate 11.30 % 9.40 %

EBITDA volatility 32.00 % 33.90 %

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:

The total stock option expense, net of foreign currency remeasurements for the years ended June 30, 2024 and 2023 was not material.

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

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

Year Ended June 30,

(In millions)

2025 2024 2023

Net earnings attributable to The Estée Lauder Companies Inc.

Net (loss) earnings attributable to The Estée Lauder Companies Inc.

$ ( 1,133 ) $ 390 $ 1,006

1 unchanged sentence

Increase in paid-in capital as a result of the purchase of shares from redeemable noncontrolling interest — 162 —

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.

$ ( 1,133 ) $ 552 $ 1,006

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

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

PER COMMON SHARE

Net earnings attributable to The Estée Lauder Companies Inc.

per common share (“basic EPS”) is computed by dividing net earnings attributable to The Estée Lauder Companies Inc.

Net (loss) earnings attributable to The Estée Lauder Companies Inc.

per common share (“basic EPS”) is computed by dividing net (loss) earnings attributable to The Estée Lauder Companies Inc.

by the weighted-average number of common shares outstanding and shares underlying PSUs and RSUs where the vesting conditions have been met.

Net earnings attributable to The Estée Lauder Companies Inc.

per common share assuming dilution (“diluted EPS”) is computed by reflecting potential dilution from stock-based awards.

Net (loss) earnings attributable to The Estée Lauder Companies Inc.

per common share assuming dilution (“diluted EPS”) is computed by reflecting potential dilution from stock-based awards using the treasury stock method.

For the year ended June 30, 2025, the effects of potentially dilutive stock options, PSUs and RSUs were excluded from the computation of diluted EPS as they were anti-dilutive due to the net loss incurred during the period.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation between the numerator and denominator of the basic and diluted EPS computations is as follows:

1 unchanged sentence

(In millions, except per share data) 2025 2024 2023

Net earnings attributable to The Estée Lauder Companies Inc.

Net (loss) earnings attributable to The Estée Lauder Companies Inc.

$ ( 1,133 ) $ 390 $ 1,006

4 unchanged sentences

Weighted-average common shares outstanding – Diluted 360.1 360.8 360.9

Net earnings attributable to The Estée Lauder Companies Inc.

Net (loss) earnings attributable to The Estée Lauder Companies Inc.

per common share:

1 unchanged sentence

Diluted $ ( 3.15 ) $ 1.08 $ 2.79

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The shares of Class A Common Stock underlying stock options, RSUs and PSUs that were excluded in the computation of diluted EPS because their inclusion would be anti-dilutive were as follows:

3 unchanged sentences

RSUs and PSUs 1.7 0.4 0.1

As of June 30, 2024, 2023 and 2022, 0.4 million shares, 0.4 million shares and 0.7 million shares at target, respectively, of Class A Common Stock underlying PSUs have been excluded from the calculation of diluted EPS because the number of shares ultimately issued is contingent on the achievement of certain performance targets of the Company, as discussed in Note 19 – Stock Programs .

As of June 30, 2025, 2024 and 2023, 0.6 million shares, 0.4 million shares and 0.4 million shares, respectively, of Class A Common Stock underlying PSUs have been excluded from the computation of diluted EPS as the number of shares ultimately issued is contingent on the achievement of applicable performance targets of the Company, as discussed in Note 19 – Stock Programs .

THE ESTÉE LAUDER COMPANIES INC.

5 unchanged sentences

Net derivative instruments, beginning of year $ 52 $ 44 $ 68

Gain on derivative instruments (1)

Provision for income taxes

(Loss) gain on derivative instruments (1)

Benefit (provision) for income taxes

6 ( 18 ) ( 11 )

Reclassification to earnings during the year:

Reclassification to (loss) earnings during the year:

Foreign currency forward contracts (2)

( 35 ) ( 50 ) ( 71 )

Interest rate-related derivatives (3)

Interest rate contracts (3)

Cross-currency swap contracts (1)(4)

( 19 ) ( 19 ) ( 9 )

Benefit for income taxes on reclassification (5)

Income tax impact of reclassification (5)

Net derivative instruments, end of year ( 5 ) 52 44

1 unchanged sentence

Changes in plan assets and benefit obligations:

Net actuarial gains (losses) recognized ( 27 ) ( 79 ) 71

Net actuarial losses recognized

( 31 ) ( 27 ) ( 79 )

Prior service credit recognized — 25 —

Translation adjustments ( 1 ) 1 ( 1 )

Benefit (provision) for income taxes

Benefit for income taxes

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

Net actuarial gains (losses)

Net actuarial gains and losses

Net prior service cost ( 6 ) ( 3 ) ( 1 )

Settlements 1 — 1

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

Income tax impact of reclassification (5)

Net pension and post-retirement adjustments, end of year ( 204 ) ( 183 ) ( 177 )

3 unchanged sentences

Purchase of shares from redeemable noncontrolling interest (8)

Benefit (provision) for income taxes

(Provision) benefit for income taxes

( 4 ) ( 6 ) 27

2 unchanged sentences

(1) Includes the gain recognized in AOCI from cross-currency swap contracts which represents the amount excluded from effectiveness testing.

(2) Amounts recorded in Net Sales in the accompanying consolidated statements of earnings.

(3) Amounts recorded in Interest expense in the accompanying consolidated statements of earnings.

(4) Amounts recorded in Selling, general and administrative in the accompanying consolidated statements of earnings.

(5) Amounts recorded in Provision for income taxes in the accompanying consolidated statements of earnings.

(6) 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.

(2) Amounts recorded in Net Sales in the accompanying consolidated statements of (loss) earnings.

(3) Amounts recorded in Interest expense in the accompanying consolidated statements of (loss) earnings.

(4) Amounts recorded in Selling, general and administrative in the accompanying consolidated statements of (loss) earnings.

(5) Amounts recorded in Provision for income taxes in the accompanying consolidated statements of (loss) earnings.

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

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

13 unchanged sentences

NOTE 24 – SEGMENT DATA AND RELATED INFORMATION

Reportable operating segments include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the “Chief Executive”) in deciding how to allocate resources and in assessing performance.

As a result of the similarities in the manufacturing, marketing and distribution processes for all of the Company’s products, much of the information provided in the consolidated financial statements is similar to, or the same as, that reviewed on a regular basis by the Chief Executive.

Although the Company operates in one business segment, beauty products, management also evaluates performance on a product category basis.

While the Company’s results of operations are also reviewed on a consolidated basis, the Chief Executive reviews data segmented on a basis that facilitates comparison to industry statistics.

Accordingly, net sales, depreciation and amortization, and operating income are available with respect to the manufacture and distribution of skin care, makeup, fragrance, hair care and other products.

These product categories meet the definition of operating segments and, accordingly, additional financial data are provided below.

The other segment includes the sales and related results of ancillary products and services that do not fit the definition of skin care, makeup, fragrance and hair care, 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 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.

The accounting policies for the Company’s reportable segments are substantially the same as those described in the summary of significant accounting policies, except for depreciation and amortization charges, which are allocated, primarily, based upon net sales.

Operating segments include components of an enterprise for which separate financial information is available that are regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company’s chief operating decision maker is the Chief Executive Officer (the “CEO”).

As a result of the similarities in the manufacturing, marketing and distribution processes for the Company’s products, much of the information provided in the consolidated financial statements is similar to, or the same as, that reviewed on a regular basis by the CEO.

While the Company’s results of operations are reviewed on a consolidated basis, the CEO also reviews data segmented on a basis that facilitates comparison to industry statistics.

Although the Company operates in one business segment, beauty products, the CEO evaluates performance based on its four major product categories:

skin care, makeup, fragrance and hair care.

These product categories meet the definition of operating and reportable segments and, accordingly, additional financial data is provided below.

Skin care products include moisturizers, serums, cleansers, toners, eye care, body care, exfoliators, acne and oil corrections, facial masks and sun care products.

Makeup products include foundations, powders, concealers, and setting sprays, lipsticks, lip liners and lip glosses, and mascaras, eyeshadows and eye liners.

Fragrance products include parfum, eau de parfum, eau de toilette, eau de cologne and body spray, as well as lotions, creams, powders, candles and soaps that are based on a particular fragrance.

Hair care products include shampoos, conditioners, styling products, treatment, finishing sprays and hair color products.

Royalty revenue associated with the license of the TOM FORD trademark as discussed in Note 15 - Revenue Recognition, as well as sales and related results of ancillary products and services that do not fit within the Company's definitions of skin care, makeup, fragrance and hair care are included in the other category.

The CEO assesses each reportable segment’s performance using their respective operating income.

Segment operating income is used in developing the overall strategy and during the annual budget process, as well as considered in budget-to-actual variances on a monthly basis when making decisions about the allocation of operating and capital resources to each reportable segment.

Segment net sales and operating income is before the impacts of restructuring and other activities and the impacts from the other category described above.

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

The accounting policies for the Company’s reportable segments are the same as those described in the summary of significant accounting policies, with the exception that the impacts of restructuring and other activities are not allocated to the reportable segments.

The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements;

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.

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

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended June 30

(In millions) 2024 2023 2022

PRODUCT CATEGORY DATA

Skin Care $ 7,908 $ 8,249 $ 9,902

Makeup 4,470 4,532 4,670

Fragrance 2,487 2,451 2,491

Hair Care 629 652 631

Other 115 53 47

15,609 15,937 17,741

Information about the Company's four operating segments is as follows:

(in millions) June 30, 2025

Skin Care Makeup Fragrance Hair Care Total

Other category net sales

Returns associated with restructuring and other activities

Net sales $ 15,608 $ 15,910 $ 17,737

Segment net sales

$ 6,962 $ 4,205 $ 2,491 $ 565 $ 14,223

Cost of sales 1,817 1,131 571 158 3,677

Selling, general and administrative expenses 4,196 3,048 1,749 448 9,441

Impairment of goodwill and other intangible assets

375 308 549 — 1,232

Other segment items (1)

— 159 — — 159

Segment operating income (loss)

$ 574 $ ( 441 ) $ ( 378 ) $ ( 41 ) $ ( 286 )

Other category operating loss

Charges associated with restructuring and other activities

Operating loss

Reconciliation to loss before income taxes:

Interest expense ( 357 )

Interest income and investment income, net 114

Other components of net periodic benefit cost ( 12 )

Loss before income taxes

Segment depreciation and amortization

$ 403 $ 243 $ 144 $ 33 $ 823

Other category

Depreciation and amortization $ 829

Skin Care $ 418 $ 383 $ 404

Makeup 236 211 213

Fragrance 132 117 89

Hair Care 33 31 20

(1) Other segment items include Talcum litigation settlement agreements

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in millions) June 30, 2024

Skin Care Makeup Fragrance Hair Care Total

Other category net sales

Returns associated with restructuring and other activities

Segment net sales

$ 7,908 $ 4,470 $ 2,487 $ 629 $ 15,494

Operating income (loss) before charges associated with restructuring and other activities:

Skin Care $ 735 $ 1,277 $ 2,776

Makeup 93 ( 21 ) 126

Fragrance 265 370 441

Hair Care ( 52 ) ( 36 ) ( 28 )

Other 53 4 ( 1 )

Cost of sales 2,278 1,290 624 191 4,383

Selling, general and administrative expenses 4,424 3,087 1,598 490 9,599

Impairment of goodwill and other intangible assets

471 — — — 471

Reconciliation:

Segment operating income (loss)

$ 735 $ 93 $ 265 $ ( 52 ) $ 1,041

Other category operating income

Charges associated with restructuring and other activities

Operating income

Reconciliation to earnings before income taxes:

Interest expense ( 378 )

1 unchanged sentence

Other components of net periodic benefit cost 13

Other income, net — — 1

Earnings before income taxes $ 772

Segment depreciation and amortization

$ 418 $ 236 $ 132 $ 33 $ 819

Other category

Depreciation and amortization $ 825

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended June 30

(In millions) 2024 2023 2022

GEOGRAPHIC DATA (1)

The Americas $ 4,581 $ 4,518 $ 4,623

Europe, the Middle East & Africa 6,140 6,225 7,681

Asia/Pacific 4,888 5,194 5,437

15,609 15,937 17,741

(in millions) June 30, 2023

Skin Care Makeup Fragrance Hair Care Total

Other category net sales

Returns associated with restructuring and other activities

Net sales $ 15,608 $ 15,910 $ 17,737

Operating income (loss):

The Americas $ 34 $ ( 73 ) $ 1,159

Europe, the Middle East & Africa 836 843 1,360

Asia/Pacific 224 824 795

Segment net sales

$ 8,249 $ 4,532 $ 2,451 $ 652 $ 15,884

Cost of sales 2,397 1,319 617 188 4,521

Selling, general and administrative expenses 4,475 3,127 1,464 500 9,566

Impairment of other intangible assets

100 107 — — 207

Segment operating income (loss)

$ 1,277 $ ( 21 ) $ 370 $ ( 36 ) $ 1,590

Other category operating income

Charges associated with restructuring and other activities

Operating income

Total assets:

The Americas $ 13,985 $ 13,292 $ 10,989

Europe, the Middle East & Africa 4,310 5,985 5,781

Asia/Pacific 3,382 4,138 4,140

$ 21,677 $ 23,415 $ 20,910

Long-lived assets (2) :

The Americas $ 2,524 $ 2,593 $ 2,609

Europe, the Middle East & Africa 1,224 1,202 1,133

Asia/Pacific 1,221 1,181 857

Reconciliation to earnings before income taxes:

Interest expense ( 255 )

Interest income and investment income, net 131

Other components of net periodic benefit cost 12

Earnings before income taxes $ 1,397

Segment depreciation and amortization

$ 383 $ 211 $ 117 $ 31 $ 742

(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.

Net sales are predominantly attributed to a country within a geographic region based on the location of the customer.

Other category

Depreciation and amortization $ 744

For the Company’s geographic region presentation, as disclosed in Note 15 – Revenue Recognition, net sales are attributed to a country based on the legal entity sale location, and this predominantly aligns with the location of the customer, with the primary exception related to the Company’s net sales from the travel retail business.

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

For the presentation of net sales by country below, the Company has presented this based on the location of the customer (e.g., the customer is the retailer in the wholesale business and the consumer in the direct-to-consumer business), and as such has attributed net sales from the travel retail business to the country to which the product is shipped, and not the Company’s country of legal sale.

The Company is domiciled in the United States.

Net sales in the United States, including net sales from travel retail locations, in fiscal 2024, 2023 and 2022 were $ 3,887 million, $ 3,848 million and $ 4,009 million, respectively.

Net sales in mainland China, as well as net sales from travel retail locations, in fiscal 2024, 2023 and 2022 were approximately 26 %, 28 % and 34 % of consolidated net sales, respectively.

In fiscal 2024, 2023 and 2022, net sales in Korea, including net sales from travel retail locations, were approximately 8 %, 10 % and 11 %, respectively, and no other country represented greater than 10% of the Company’s consolidated net sales.

The Company’s long-lived assets in the United States at June 30, 2024, 2023 and 2022 were $ 2,087 million, $ 2,136 million and $ 2,153 million, respectively.

Net sales in the United States, including net sales from travel retail locations in the United States, as well as net sales in foreign countries, including net sales from travel retail locations in that country, that contribute 10% or more of net sales of the Company in fiscal 2025, 2024 and 2023 were as follows:

(in millions) 2025

United States

$ 3,762 $ 3,887 $ 3,848

Mainland China

3,652 4,019 4,380

718 1,299 1,558

All other countries

6,194 6,403 6,124

$ 14,326 $ 15,608 $ 15,910

(1) Korea contributed 10 % of consolidated net sales in fiscal 2023.

Fiscal 2025 and 2024 amounts were included for comparability purposes only.

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

The Company’s long-lived assets, consisting of property, plant and equipment, net and operating lease ROU assets, in the United States, and in foreign countries that are 10% or greater of the Company’s consolidated long-lived assets at June 30, 2025, 2024 and 2023 were as follows:

(in millions) 2025

United States

$ 1,956 $ 2,087 $ 2,136

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 )

All other countries

2,388 2,149 2,087

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

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

Long-lived assets

$ 5,124 $ 4,969 $ 4,976

THE ESTÉE LAUDER COMPANIES INC.

22 unchanged sentences

3.2 Certificate of Retirement of $6.50 Cumulative Redeemable Preferred Stock (filed as Exhibit 3.2 to our Current Report on Form 8-K filed on July 19, 2012) (SEC File No.1-14064).*

3.3 Amended and Restated Bylaws (filed as Exhibit 3.1 to our Current Report on Form 8-K filed on May 23, 2012) (SEC File No.

3.3 Amended and Restated Bylaws (filed as Exhibit 3.

2 to our Current Report on Form 8-K filed on May 23, 20 25 ) (SEC File No.

4.1 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

60 unchanged sentences

Amendments to The Estée Lauder Companies Retirement Growth Account Plan, as amended and restated effective as of January 1, 2023, as further amended effective January 1, 2025 (filed as Exhibit 10.5 to our Quarterly Report on Form 10-Q filed on February 4, 2025) (SEC File No.

10.4 The Estee Lauder Inc.

2 unchanged sentences

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.

E xecutive Annual Incentive Plan (SEC File No.

10.6 Employment Agreement with Tracey T.

16 unchanged sentences

Lauder (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on May 1, 2020) (SEC File No.

Number Description

10.8 Employment Agreement with William P.

2 unchanged sentences

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

Number Description

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

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

Second Amendment to Employment Agreement with Fabrizio Freda (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on February 4, 2025) (SEC File No.

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

1 unchanged sentence

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.

Employment Agreement with Stéphane de La Faverie (filed as Exhibit 10.13 to our Annual Report on Form 10-K filed on August 19, 20 24) (SEC File No.

Amended and Restated Employment Agreement with Stéphane de La Faverie (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on February 4, 2025) (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.

E mployment Agreement with Rashida La Lande (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.

14 unchanged sentences

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.

Number Description

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.

1 unchanged sentence

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 10.4 to our Quarterly Report on Form 10-Q filed on February 4, 2025) (SEC File No.

Number Description

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.

7 unchanged sentences

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.

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.

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 13, 2024) (SEC File No.

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

6 unchanged sentences

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.

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.

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

6 unchanged sentences

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.

Number Description

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.

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 10.3 to our Quarterly Report on Form 10-Q filed on February 4, 2025) (SEC File No.

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.

Number Description

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

2 unchanged sentences

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.

$2.5 Billion Credit Facility, dated as of J une 7 , 202 4 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 J une 7, 2024 ) (SEC File No.

Form of Restricted Stock 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) (SEC File No.

Form of Non-annual Restricted Stock 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) (SEC File No.

Form of PRGP Non-annual Restricted Stock 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) (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.

18 unchanged sentences

(filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on May 1, 2020) (SEC File No.

Number Description

Form of Art Loan Agreement between Lender and Estee Lauder Inc.

9 unchanged sentences

Fourth Amendment to Creative Consultant Agreement between Estee Lauder Inc.

and Aerin Lauder Zinterhofer effective July 1, 2024.†

and Aerin Lauder Zinterhofer effective July 1, 2024 (filed as Exhi bit 10.25d to our Annual R eport on Form 10-K filed on August 19, 2024) (SEC File No.

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.

Number Description

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.

3 unchanged sentences

The Estée Lauder Companies Inc.

Insider Trading Policies.

Insider Trading Policies (filed as Exhibit 19.1 to our Annual Report on Form 10-K filed on August 19, 2024) (SEC File No.

1-1 40 6 4) .

21.1 List of significant subsidiaries.

8 unchanged sentences

The Estée Lauder Companies Inc.

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

Incentive-Based Compensation Recovery Policy (2023 Clawback Policy) (filed as Exhibit 97.1 to our Annual Report on Form 10-K filed on August 19, 2024) (SEC File No.

104 The cover page from The Estée Lauder Companies Inc.’s Annual Report on Form 10-K for the year ended June 30, 2025 is formatted in iXBRL

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures