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

   
THE ESTÉE LAUDER COMPANIES INC.
Reconciliation of Certain Consolidated Statements of Earnings Accounts Before and After Returns and Charges
(Unaudited; In millions, except per share data and percentages)
 
Three Months Ended Three Months Ended
September 30, 2012 September 30, 2011
As Reported   Returns/ Charges   Before Returns/ Charges As Reported   Returns/ Charges   Before Returns/ Charges % Change versus Prior Year Before Returns/Charges
Net Sales   $ 2,549.5   $ 0.0 $ 2,549.5 $ 2,476.7 $ (0.7 ) $ 2,476.0 3 %
Cost of sales   539.2   (0.0 )   539.2   534.3   (0.1 )   534.2
 
Gross Profit 2,010.3 0.0 2,010.3 1,942.4 (0.6 ) 1,941.8 4 %
Gross Margin 78.9 % 78.9 % 78.4 % 78.4 %
 
Operating expenses   1,528.3   (0.4 )   1,527.9   1,512.4   (4.7 )   1,507.7 1 %
 
Operating Expense Margin 60.0 % 60.0 % 61.0 % 60.9 %
 
Operating Income 482.0 0.4 482.4 430.0 4.1 434.1 11 %
Operating Income Margin 18.9 % 18.9 % 17.4 % 17.5 %
 

Interest expense on debt extinguishment
19.1 (19.1 )
 
Provision for income taxes 149.3 6.9 156.2 135.4 1.2 136.6

Net Earnings Attributable to The Estée Lauder Companies Inc.

 
299.5 12.6 312.1 278.6 2.9 281.5 11 %
 

Diluted net earnings attributable to The Estée Lauder Companies Inc. per common share
.76 .03 .79 .70 .00 .70 12 %
     

THE ESTÉE LAUDER COMPANIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; In millions)
 

September 30
June 30 September 30

2012

2012

2011
ASSETS      
Current Assets
Cash and cash equivalents $ 1,053.7 $ 1,347.7 $ 719.5
Accounts receivable, net 1,604.7 1,060.3 1,378.5
Inventory and promotional merchandise, net 1,067.9 983.6 982.2
Prepaid expenses and other current assets 486.8 463.5 481.9
Total Current Assets 4,213.1 3,855.1 3,562.1
 
Property, Plant and Equipment, net 1,268.9 1,231.8 1,125.1
Other Assets 1,525.6 1,506.1 1,448.2
Total Assets $ 7,007.6 $ 6,593.0 $ 6,135.4
 
LIABILITIES AND EQUITY
Current Liabilities
Current debt $ 24.0 $ 219.0 $ 141.8
Accounts payable 421.7 493.8 424.2
Other current liabilities 1,526.7 1,413.0 1,403.6
Total Current Liabilities 1,972.4 2,125.8 1,969.6
 
Noncurrent Liabilities
Long-term debt 1,330.7 1,069.1 1,072.8
Other noncurrent liabilities 664.0 650.6 601.0
Total Noncurrent Liabilities 1,994.7 1,719.7 1,673.8
 
Total Equity 3,040.5 2,747.5 2,492.0
Total Liabilities and Equity $ 7,007.6 $ 6,593.0 $ 6,135.4
                         
 
SELECT CASH FLOW DATA
(Unaudited; In millions)
 
Three Months Ended
September 30
2012   2011
Cash Flows from Operating Activities
Net earnings $ 299.6 $ 278.6
Depreciation and amortization 77.5 69.6
Deferred income taxes (18.8 ) (9.6 )
Other items 58.3 47.3
Changes in operating assets and liabilities:
Increase in accounts receivable, net (518.1 ) (482.1 )
Increase in inventory and promotional merchandise, net (59.2 ) (21.4 )
Increase in other assets, net (26.9 ) (9.1 )
Increase in accounts payable and other liabilities   62.4   90.5
Net cash flows used for operating activities $ (125.2 ) $ (36.2 )
 
Capital expenditures $ 95.5 $ 80.8
Payments to acquire treasury stock 165.4 402.9
Acquisition of businesses and other intangible assets 8.7 7.7

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