SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) :
August 17, 2004
The Estee Lauder Companies Inc.
(Exact name of registrant as specified in its charter)
Delaware 11-2408943
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
767 Fifth Avenue, New York, New York 10153
(Address of principal executive offices) (Zip Code)
Commission File Number: 1-14064
212-572-4200
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
ITEM 12. Results of Operations and Financial Conditions
On August 17, 2004, The Estee Lauder Companies Inc. issued a press release
announcing its fiscal 2004 full year and fourth quarter results and its
estimated fiscal 2005 first half and full year results. A copy of the press
release is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
THE ESTEE LAUDER COMPANIES INC.
Date: August 17, 2004 By: /s/Richard W. Kunes
---------------------
Richard W. Kunes
Senior Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
THE ESTEE LAUDER COMPANIES INC.
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
99.1 Press release dated August 17, 2004 of the Estee Lauder
Companies Inc.
Exhibit No. 99.1
THE Contact:
ESTEE Investor Relations:
LAUDER Dennis D'Andrea
COMPANIES INC. (212) 572-4384
767 Fifth Avenue Media Relations:
New York, NY 10153 Sally Susman
(212) 572-4430
--------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE:
ESTEE LAUDER COMPANIES REPORTS 14% FULL YEAR NET SALES GROWTH
PER SHARE EARNINGS FROM CONTINUING OPERATIONS
INCREASE 26% TO $1.62
EXPECTS FISCAL 2005 EARNINGS PER SHARE OF BETWEEN $1.88 AND $1.93
New York, NY, August 17, 2004 - The Estee Lauder Companies Inc. (NYSE: EL) today
reported net sales for its fiscal year ended June 30, 2004 of $5.79 billion, a
14% increase over the $5.10 billion reported in the prior year. Excluding the
impact of foreign currency translation, net sales rose 9% for the year.
For the full fiscal year 2004, the Company reported net earnings attributable to
common stock from continuing operations of $375.4 million, up 24% from $302.2
million last year (giving effect to preferred stock dividends in both periods).
Diluted earnings per common share from continuing operations for the year rose
26% to $1.62 from $1.29 reported in the prior year. Net earnings attributable to
common stock, including discontinued operations, were $342.1 million for the
year ended June 30, 2004, up 15% compared with $296.4 million in the prior year.
Diluted earnings per common share, including discontinued operations for the
year, increased 17% to $1.48 compared with $1.26 reported in the prior year.
Fiscal year 2003 results included a special pre-tax charge, which was recorded
in the fourth quarter of that year, of $22.0 million, or $13.5 million
after-tax, equal to $.06 per diluted share, in connection with a pending
settlement of a class action lawsuit brought against a number of defendants,
including the Company.
Excluding the special charge taken in the prior year, net earnings attributable
to common stock from continuing operations for fiscal year 2004 increased 19%,
and diluted earnings per share from continuing operations increased 21%. A
reconciliation between GAAP and non-GAAP financial measures for fiscal 2003 can
be found on pages 7 and 8 of this press release.
Page 1 of 9
William P. Lauder, President and Chief Executive Officer, said, "Fiscal 2004 was
a year when we exceeded our expectations. We began the year with strong
financial targets, revised them upward as the U.S. retail environment improved,
and ended the year with outstanding results. Our worldwide brand recognition and
innovative products provided the basis for across the board sales growth in all
product categories and geographic regions. Our international business grew
double-digits, while domestically a rebound in consumer sentiment generated
solid sales increases. Strong sales growth, cost of sales improvements and
operating expense discipline led to an 80 basis point operating margin
improvement and our strong 21% earnings per share growth.
We'll look to carry this momentum into the new fiscal year setting our sights on
continued growth and our long-term objectives. We expect to benefit from further
building our brands, expanding our markets globally and diversifying our
channels of distribution. We are committed to profitable growth, and will
continue to demonstrate our ability to turn top line growth into greater bottom
line value for our stockholders."
Fourth Quarter Results
----------------------
Net sales for the quarter ended June 30, 2004, increased 15% to $1.40 billion,
compared with $1.22 billion in the fourth quarter of fiscal 2003. Excluding the
impact of foreign currency translation, net sales increased 12% in the fourth
quarter. Net sales in the quarter increased double-digits in skin care, makeup
and fragrance, while hair care increased high-single-digits. Net sales increased
also in each geographic region, reflecting double-digit growth in Europe, the
Middle East & Africa and Asia/Pacific and high-single-digit growth in the
Americas. In constant currency, net sales increased in each product category
and geographic region. The Company reported net earnings attributable to common
stock from continuing operations for the fourth quarter of fiscal year 2004 of
$71.3 million, up 41% from $50.6 million in the same prior-year period. Diluted
earnings per common share from continuing operations for the three months ended
June 30, 2004 were $.31, a 41% increase from $.22 reported in the same
prior-year period. Net earnings attributable to common stock, including
discontinued operations, were $71.1 million for the current three months, a 51%
increase compared with $47.2 million in the same period last year, while diluted
earnings per common share for the fiscal 2004 fourth quarter increased 51% to
$.31 compared with $.20 reported in the prior-year period.
Excluding the special charge in the three months ended June 30, 2003, net
earnings attributable to common stock and diluted earnings per share from
continuing operations for the current quarter both increased 11%.
Results by Product Category
---------------------------
Net sales of skin care products for the year increased 13% to $2.14 billion on a
reported basis and rose 8% in local currencies. The higher sales were supported
by recent launches from Estee Lauder of Hydra Complete Multi-Level Moisture
Creme and Idealist Micro-D Deep Thermal Refinisher, as well as strong sales of
Re-Nutriv Intensive Lifting products. Strong sales of Repairwear Day SPF 15
Intensive Cream and Pore Minimizer by Clinique, as well as its 3-Step Skin Care
System also contributed to the category's growth. The increase also reflects the
inclusion of a full year of sales of the Darphin line of products, which are
primarily skin care, and growth in developing brands.
Page 2 of 9
Makeup sales for the year rose 14% to $2.15 billion on a reported basis and
increased 10% in local currencies. In addition to solid growth from M.A.C and
Bobbi Brown, the higher sales reflect new or recent product introductions such
as Perfectly Real Makeup, High Impact Mascara, High Impact Eye Shadow and Colour
Surge Bare Brilliance from Clinique, as well as Electric Intense LipCreme, Ideal
Matte Refinishing Makeup SPF 8, and Artist's Lip and Eye Pencils by Estee
Lauder.
Fragrance sales on a reported basis increased 15% to $1.22 billion compared to
the prior year and rose 10% in local currencies. The higher sales were generated
from the current year launches of Estee Lauder Beyond Paradise, Aramis Life,
Clinique Simply and Tommy Jeans. Fragrance sales also benefited from improved
results in the Company's travel retail business. These increases were partially
offset by lower sales of Estee Lauder pleasures, Intuition and Beautiful by
Estee Lauder, certain Tommy Hilfiger fragrances and Clinique Happy.
Sales of hair care products for the year rose 9% to $249.4 million on a reported
basis and increased 7% in local currencies. The increase reflects higher sales
at Aveda and Bumble and bumble due to growth in existing and new points of
distribution, as well as the success of new and existing products.
Operating income increased in skin care, makeup and hair care due to higher
sales. Fragrance operating income decreased reflecting the soft domestic
fragrance market, coupled with increased support spending behind recent product
launches and their international rollout, as well as development costs for
future fragrance launches and new brands.
Results by Geographic Region
----------------------------
In the Americas, net sales for the year increased 7% to $3.15 billion. The
increase is due to the success of new and certain existing products, strong
growth from most brands and solid increases from most of the Company's
freestanding retail stores, all of which reflected the strengthening retail
environment during the year. All product categories in this region had sales
growth. Operating income in the Americas increased primarily due to higher sales
resulting from an improved retail environment, strong product launches and
growth from newer brands.
In Europe, the Middle East & Africa, net sales increased 24% from the prior year
to $1.87 billion, and rose 14% in local currency. The Company's travel retail
business continued its strong recovery in the current year compared with the
prior year. In constant currency, the Company experienced sales growth in most
countries, led by strong sales in the United Kingdom, Spain, Greece and Russia.
The region also benefited from a full year of sales of Darphin, which makes the
majority of its sales in Europe. These increases were partially offset by lower
sales in Italy, Switzerland, Germany and France. Operating profitability
increased, primarily due to the increase in the Company's travel retail business
and improvements in a number of countries including the United Kingdom and
Spain, as well as the inclusion of a full year of results from Darphin.
Asia/Pacific net sales grew 17% over the prior year to $771.4 million. On a
local currency basis, Asia/Pacific net sales rose 9%. In local currency every
country experienced sales growth, led by double-digit increases in China,
Taiwan, Thailand, Hong Kong and Malaysia. Sales in Japan increased slightly in
the year. Operating profit in the region increased, reflecting improved results
in Taiwan, Hong Kong and Thailand.
Page 3 of 9
Cash Flow
---------
For the twelve months ended June 30, 2004, the Company generated $669.8 million
in cash flow from operating activities, a 21% increase over the prior-year
period. The increase primarily resulted from higher net earnings and
improvements in certain working capital components. Operating cash flow was
utilized primarily for the redemption of long-term debt (i.e., most of the
redeemable preferred stock), capital investments, the repurchase of shares of
the Company's Class A Common Stock and dividend payments.
Estimate of Fiscal 2005 First Half and Full Year
------------------------------------------------
Net sales for the first half of fiscal 2005 are expected to grow between 8% and
9% in dollars, including a benefit of slightly less than one percent due to
foreign currency exchange, versus fiscal 2004's first half. Geographic
region net sales growth in constant currency is expected to be led by Europe,
the Middle East & Africa, followed by Asia/Pacific and the Americas. On a
product category basis, in constant currency, hair care and makeup are expected
to be the leading growth categories, followed by skin care, while fragrance is
expected to decline slightly. The Company expects to achieve diluted earnings
per share of between $.95 and $.98 for the first half as it continues to invest
in advertising, sampling and merchandising and support significant launch
activity.
For the Company's fiscal 2005 full-year results, reported net sales are expected
to grow between 7% and 8% versus fiscal 2004, which reflects a modest negative
foreign currency translation impact. At the same time the Company expects to
achieve diluted earnings per share of between $1.88 and $1.93 for the fiscal
2005 year. Geographic region net sales growth in constant currency is expected
to be led by the Americas, followed by Europe, the Middle East & Africa and
Asia/Pacific. On a product category basis, in constant currency, hair care
and skin care are expected to be the leading sales growth categories, followed
by makeup and fragrance.
Forward-looking Statements
--------------------------
The forward-looking statements in this press release, including those containing
words like "will," "believe," "expect," "anticipate," and "estimate," those in
Mr. Lauder's remarks and those in the "Estimate of Fiscal 2005 First Half and
Full Year" section involve risks and uncertainties. Factors that could cause
actual results to differ materially from those forward-looking statements
include the following:
(1) increased competitive activity from companies in the skin care,
makeup, fragrance and hair care businesses, some of which have
greater resources than the Company does;
(2) the Company's ability to develop, produce and market new products on
which future operating results may depend;
(3) consolidations, restructurings, bankruptcies and reorganizations in
the retail industry causing a decrease in the number of stores that
sell the Company's products, an increase in the ownership
concentration within the retail industry, ownership of retailers by
the Company's competitors and ownership of competitors by the
Company's customers that are retailers;
(4) shifts in the preferences of consumers as to where and how they shop
for the types of products and services the Company sells;
Page 4 of 9
(5) social, political and economic risks to the Company's foreign or
domestic manufacturing, distribution and retail operations,
including changes in foreign investment and trade policies and
regulations of the host countries and of the United States;
(6) changes in the laws, regulations and policies that affect, or will
affect, the Company's business, including changes in accounting
standards, tax laws and regulations, trade rules and customs
regulations, and the outcome and expense of legal or regulatory
proceedings;
(7) foreign currency fluctuations affecting the Company's results of
operations and the value of its foreign assets, the relative prices
at which the Company and its foreign competitors sell products in
the same markets and the Company's operating and manufacturing costs
outside of the United States;
(8) changes in global or local economic conditions that could affect
consumer purchasing, the willingness of consumers to travel, the
financial strength of the Company's customers, the cost and
availability of capital, which the Company may need for new
equipment, facilities or acquisitions, and the assumptions
underlying the Company's critical accounting estimates;
(9) shipment delays, depletion of inventory and increased production
costs resulting from disruptions of operations at any of the
facilities which, due to consolidations in the Company's
manufacturing operations, now manufacture nearly all of the
Company's supply of a particular type of product (i.e. focus
factories);
(10) real estate rates and availability, which may affect the Company's
ability to increase the number of retail locations at which the
Company's products are sold and the costs associated with our other
facilities;
(11) changes in product mix to products which are less profitable;
(12) the Company's ability to acquire or develop new information and
distribution technologies, on a timely basis and within the
Company's cost estimates;
(13) the Company's ability to capitalize on opportunities for improved
efficiency, such as globalization, and to integrate acquired
businesses and realize value therefrom; and
(14) consequences attributable to the events that are currently taking
place in the Middle East, including further attacks, retaliation and
the threat of further attacks or retaliation.
The Estee Lauder Companies Inc. is one of the world's leading manufacturers and
marketers of quality skin care, makeup, fragrance and hair care products. The
Company's products are sold in over 130 countries and territories under
well-recognized brand names, including Estee Lauder, Clinique, Aramis,
Prescriptives, Origins, M.A.C, Bobbi Brown, Tommy Hilfiger, La Mer, Donna Karan,
Aveda, Stila, Jo Malone, Bumble and bumble, kate spade beauty, Darphin, Michael
Kors and Rodan & Fields.
An electronic version of this release can be found at the Company's website,
www.elcompanies.com.
--------------------
- Tables Follow -
Page 5 of 9
THE ESTEE LAUDER COMPANIES INC.
SUMMARY OF CONSOLIDATED RESULTS
(Dollars in millions, except per share data)
Three Months Ended Year Ended
June 30 June 30
------------------ Percent ---------- Percent
2004 2003 Change 2004 2003 Change
---- ---- ------ ---- ---- ------
Net Sales................................................. $1,403.1 $1,219.3 15.1% $5,790.4 $5,096.0 13.6%
Cost of sales............................................. 340.9 287.3 1,476.3 1,324.4
-------- -------- ------- --------
Gross Profit.............................................. 1,062.2 932.0 14.0% 4,314.1 3,771.6 14.4%
-------- -------- ------- --------
Gross Margin....................................... 75.7% 76.4% 74.5% 74.0%
Operating expenses:
Selling, general and administrative.................... 934.6 816.9 3,651.3 3,225.6
Special charges (A).................................... - 22.0 - 22.0
Related party royalties................................ 1.9 5.5 18.8 20.3
-------- -------- -------- --------
936.5 844.4 10.9% 3,670.1 3,267.9 12.3%
-------- -------- -------- --------
Operating Expense Margin........................... 66.7% 69.2% 63.4% 64.1%
Operating Income ......................................... 125.7 87.6 43.5% 644.0 503.7 27.9%
Operating Income Margin............................ 9.0% 7.2% 11.1% 9.9%
Interest expense, net (B)................................. 5.3 1.1 27.1 8.1
-------- -------- -------- --------
Earnings before Income Taxes, Minority Interest
and Discontinued Operations............................ 120.4 86.5 39.2% 616.9 495.6 24.5%
Provision for income taxes................................ 46.9 27.3 232.6 163.3
Minority interest, net of tax............................. (2.2) (2.8) (8.9) (6.7)
-------- -------- -------- --------
Net Earnings from Continuing Operations................... 71.3 56.4 26.4% 375.4 325.6 15.3%
Discontinued operations, net of tax (C)................... (0.2) (3.4) (33.3) (5.8)
-------- -------- -------- --------
Net Earnings.............................................. 71.1 53.0 34.2% 342.1 319.8 7.0%
Preferred stock dividends (B)............................. - 5.8 - 23.4
-------- -------- -------- --------
Net Earnings Attributable to Common Stock................. $ 71.1 $ 47.2 50.6% $ 342.1 $ 296.4 15.4%
======== ======== ======== ========
Basic net earnings per common share:
Net earnings attributable to common stock from
continuing operations................................ $ .31 $ .22 42.1% $ 1.65 $ 1.30 26.6%
Discontinued operations................................ (.00) (.01) (.15) (.03)
-------- -------- -------- --------
Net earnings attributable to common stock.............. $ .31 $ .21 51.9% $ 1.50 $ 1.27 17.8%
======== ======== ======== ========
Diluted net earnings per common share:
Net earnings attributable to common stock from
continuing operations................................ $ .31 $ .22 40.9% $ 1.62 $ 1.29 25.9%
Discontinued operations................................ (.00) (.02) (.14) (.03)
-------- -------- -------- --------
Net earnings attributable to common stock.............. $ .31 $ .20 50.6% $ 1.48 $ 1.26 17.0%
======== ======== ======== ========
Weighted average common shares outstanding:
Basic.................................................. 227.9 229.8 228.2 232.6
Diluted................................................ 232.2 232.2 231.6 234.7
Page 6 of 9
THE ESTEE LAUDER COMPANIES INC.
SUMMARY OF CONSOLIDATED RESULTS
(In millions, except per share data)
(A) Fiscal 2003 includes a special pre-tax charge of $22.0 million, or $13.5
million after-tax, equal to $.06 per diluted share, in connection with the
pending settlement of a class action lawsuit brought against various defendants,
including the Company. This earnings release includes some non-GAAP financial
measures relating to this charge. The following sets forth a reconciliation
between the non-GAAP financial measures and the most directly comparable GAAP
measure for certain statement of earnings accounts before and after the special
charge. The Company uses the non-GAAP financial measure, among other things, to
evaluate its operating performance and the measure represents the manner in
which the Company conducts and views its business. Management believes that
excluding these items that are special in nature or that are not comparable from
period to period helps investors and others compare operating performance
between two periods. There were no events or transactions in fiscal 2004 for
which the Company believes such a presentation would be relevant.
Three Months Ended June 30
-----------------------------------------------------------
2004 2003 % Change
----------- -------------------------------------------- Fiscal 2004
versus
Special Before Special Prior Year
As Reported As Reported Charge Charge Before Charge
----------- ----------- ------ ------ -------------
Net Sales................................... $1,403.1 $1,219.3 $1,219.3 15.1%
Cost of sales............................... 340.9 287.3 287.3
-------- -------- --------
Gross Profit................................ 1,062.2 932.0 932.0 14.0%
-------- -------- --------
Gross Margin......................... 75.7% 76.4% 76.4%
Operating expenses.......................... 936.5 844.4 $22.0 822.4 13.9%
-------- -------- ----- --------
Operating Expense Margin ............ 66.7% 69.2% 67.4%
Operating Income............................ 125.7 87.6 22.0 109.6 14.7%
Operating Income Margin ............. 9.0% 7.2% 9.0%
Provision (benefit) for income taxes........ 46.9 27.3 (8.5) 35.8
Net Earnings from Continuing Operations..... 71.3 56.4 13.5 69.9 2.0%
Discontinued operations, net of tax......... (0.2) (3.4) - (3.4)
-------- -------- ----- --------
Net Earnings................................ 71.1 53.0 13.5 66.5 6.9%
Preferred stock dividends................... - (5.8) - (5.8)
-------- -------- ----- --------
Net Earnings Attributable to Common Stock... $ 71.1 $ 47.2 $13.5 $ 60.7 17.1%
======== ======== ===== ========
------------------------------------------------------------------------------------------------------------------------
Net Earnings from Continuing Operations .... $ 71.3 $ 56.4 $13.5 $ 69.9 2.0%
Preferred stock dividends................... - (5.8) - (5.8)
-------- -------- ----- --------
Net Earnings Attributable to Common Stock
from Continuing Operations................ $ 71.3 $ 50.6 $13.5 $ 64.1 11.2%
======== ======== ===== ========
------------------------------------------------------------------------------------------------------------------------
Diluted net earnings per common share:
Net earnings attributable to common stock from
continuing operations.................... $ .31 $ .22 $ .06 $ .28 11.2%
Net earnings attributable to common stock... .31 .20 .06 .26 17.1%
Page 7 of 9
THE ESTEE LAUDER COMPANIES INC.
SUMMARY OF CONSOLIDATED RESULTS
(In millions, except per share data)
Year Ended June 30
------------------------------------------------------------
2004 2003 % Change
----------- --------------------------------------------- Fiscal 2004
versus
Special Before Special Prior Year
As Reported As Reported Charge Charge Before Charge
----------- ----------- ------ ------ -------------
Net Sales................................... $5,790.4 $5,096.0 $5,096.0 13.6%
Cost of sales............................... 1,476.3 1,324.4 1,324.4
-------- -------- --------
Gross Profit................................ 4,314.1 3,771.6 3,771.6 14.4%
-------- -------- --------
Gross Margin......................... 74.5% 74.0% 74.0%
Operating expenses.......................... 3,670.1 3,267.9 $22.0 3,245.9 13.1%
-------- -------- ----- --------
Operating Expense Margin ............ 63.4% 64.1% 63.7%
Operating Income............................ 644.0 503.7 22.0 525.7 22.5%
Operating Income Margin ............. 11.1% 9.9% 10.3%
Provision (benefit) for income taxes........ 232.6 163.3 (8.5) 171.8
Net Earnings from Continuing Operations..... 375.4 325.6 13.5 339.1 10.7%
Discontinued operations, net of tax......... (33.3) (5.8) - (5.8)
-------- -------- ----- --------
Net Earnings................................ 342.1 319.8 13.5 333.3 2.6%
Preferred stock dividends................... - (23.4) - (23.4)
-------- -------- ----- --------
Net Earnings Attributable to Common Stock... $ 342.1 $ 296.4 $13.5 $ 309.9 10.4%
======== ======== ===== ========
------------------------------------------------------------------------------------------------------------------------
Net Earnings from Continuing Operations .... $ 375.4 $ 325.6 $13.5 $ 339.1 10.7%
Preferred stock dividends................... - (23.4) - (23.4)
-------- -------- ----- --------
Net Earnings Attributable to Common Stock
from Continuing Operations................ $ 375.4 $ 302.2 $13.5 $ 315.7 18.9%
======== ======== ===== ========
------------------------------------------------------------------------------------------------------------------------
Diluted net earnings per common share:
Net earnings attributable to common stock
from continuing operations............... $ 1.62 $ 1.29 $ .06 $ 1.35 20.5%
Net earnings attributable to common stock... 1.48 1.26 .06 1.32 11.9%
(B) Beginning in fiscal 2004, the Company adopted Statement of Financial
Accounting Standards No. 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity." This rule requires that, among
other things, mandatorily redeemable instruments be classified as a liability.
Based on the provisions of this statement, the Company has classified its
Cumulative Redeemable Preferred Stock as a liability and characterized the
related dividends of the current periods as interest expense. Such dividends are
not deductible for income tax purposes and, as a result, adoption of the new
standard increases the Company's effective tax rate. This statement has no
effect on the Company's net earnings attributable to common stock, earnings per
common share or financial condition. Because the preferred stock dividends are
included in net earnings, they are not shown as dividends paid in the statement
of cash flows. In June 2004, the Company redeemed $291.6 million of its
redeemable preferred stock.
(C) In February 2004, the Company sold the assets and operations of its
reporting unit that sold jane brand products. Prior to the sale of the business,
in December 2003, the Company committed to a plan to sell such assets and
operations. At the time the decision was made, circumstances warranted that the
Company conduct an assessment of the tangible and intangible assets of the jane
business. Based on its assessment, the Company determined that the carrying
amount of these assets as then reflected on the Company's consolidated balance
sheets exceeded their estimated fair value. In accordance with the assessment
and the closing of the sale, the Company recorded an after-tax charge to
discontinued operations of $33.3 million for the fiscal year ended June 30,
2004. The charge represents the impairment of goodwill in the amount of $26.4
million; the reduction in value of other tangible assets in the amount of $2.1
million, net of taxes; and the reporting unit's operating loss of $4.8 million,
net of tax. Included in the operating loss of the fiscal year were additional
costs associated with the sale and discontinuation of the business. All
consolidated statements of earnings information for prior periods has been
restated for comparative purposes, including the restatement of the makeup
product category and the Americas region data.
Page 8 of 9
THE ESTEE LAUDER COMPANIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
June 30 June 30
2004 2003
---- ----
ASSETS
Current Assets
Cash and cash equivalents............................................................... $ 611.6 $ 364.1
Accounts receivable, net................................................................ 664.9 634.2
Inventory and promotional merchandise, net.............................................. 653.5 599.0
Prepaid expenses and other current assets............................................... 269.2 247.6
-------- --------
Total Current Assets............................................................... 2,199.2 1,844.9
-------- --------
Property, Plant and Equipment, net...................................................... 647.0 607.7
Other Assets .......................................................................... 861.9 897.3
-------- --------
Total Assets....................................................................... $3,708.1 $3,349.9
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term debt......................................................................... $ 73.8 $ 7.8
Accounts payable........................................................................ 267.3 229.9
Other current liabilities............................................................... 980.9 815.9
-------- --------
Total Current Liabilities.......................................................... 1,322.0 1,053.6
-------- --------
Noncurrent Liabilities
Long-term debt.......................................................................... 461.5 283.6
Other noncurrent liabilities and minority interest...................................... 191.1 229.1
Cumulative Redeemable Preferred Stock, at redemption value.............................. - 360.0
Total Stockholders' Equity.............................................................. 1,733.5 1,423.6
-------- --------
Total Liabilities and Stockholders' Equity......................................... $3,708.1 $3,349.9
======== ========
SELECTED CASH FLOW DATA
(In millions)
Year Ended
June 30
----------------
2004 2003
---- ----
Cash Flows from Operating Activities
Net earnings......................................................................... $342.1 $319.8
Depreciation and amortization........................................................ 191.7 174.8
Deferred income taxes................................................................ 18.3 36.5
Discontinued operations.............................................................. 33.3 -
Other items.......................................................................... 17.6 9.1
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable, net.................................. (18.4) 38.6
Increase in inventory and promotional merchandise, net........................... (45.7) (15.7)
Increase in accounts payable and other accrued liabilities....................... 122.6 49.7
Other operating assets and liabilities, net...................................... 8.3 (59.7)
------ ------
Net cash flows provided by operating activities................................ $669.8 $553.1
====== ======
Capital expenditures................................................................. 206.5 163.1
Repayments and redemptions of long-term debt......................................... 293.7 135.8
Payments to acquire treasury stock................................................... 115.9 352.5
Dividends paid....................................................................... 68.5 81.7
# # #
Page 9 of 9