The Estée 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 150 countries and territories under the following brand names: Estée Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, M•A•C, Bobbi Brown, Tommy Hilfiger, Kiton, La Mer, Donna Karan, Aveda, Jo Malone, Bumble and bumble , Darphin, Michael Kors, American Beauty, Flirt!, GoodSkin Labs, Grassroots Research Labs, Tom Ford, Coach, Ojon, Smashbox, Ermenegildo Zegna, Aerin Beauty and Osiao.

An electronic version of this release can be found at the Company’s website, www.elcompanies.com.

– Tables Follow –
                       
 

THE ESTÉE LAUDER COMPANIES INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited; In millions, except per share data and percentages)
 

Three Months Ended December 31

Percent Change

Six Months Ended December 31

Percent Change

2012
     

2011

2012
     

2011
 
Net Sales (A) $ 2,933.0 $ 2,737.5 7 % $ 5,482.5 $ 5,214.2 5 %
Cost of Sales (A)   568.0   551.0   1,107.2   1,085.3
Gross Profit   2,365.0   2,186.5 8 %   4,375.3   4,128.9 6 %
 
Gross Margin 80.6 % 79.9 % 79.8 % 79.2 %
 
Operating expenses:
Selling, general and administrative 1,698.6 1,576.7 3,226.5 3,084.4
Restructuring and other charges (A) 13.3 6.1 13.7 10.8
Impairment of other intangible assets (B)     6.7     6.7
  1,711.9   1,589.5 8 %   3,240.2   3,101.9 4 %
Operating Expense Margin 58.3 % 58.1 % 59.1 % 59.5 %
 
Operating Income 653.1 597.0 9 % 1,135.1 1,027.0 11 %
 
Operating Income Margin 22.3 % 21.8 % 20.7 % 19.7 %
 
Interest expense, net 13.4 16.6 29.2 32.6
Interest expense on debt extinguishment (C) 19.1
Other income (D)   21.3   10.5   23.1   10.5
Earnings before Income Taxes 661.0 590.9 12 % 1,109.9 1,004.9 10 %
 
Provision for income taxes   211.6   192.5   360.9   327.9
Net Earnings 449.4 398.4 13 % 749.0 677.0 11 %
 
Net earnings attributable to noncontrolling interests   (1.9 )   (1.7 )   (2.0 )   (1.7 )
Net Earnings Attributable to The Estée Lauder Companies Inc. $ 447.5 $ 396.7

13
% $ 747.0 $ 675.3 11 %
 
 
Net earnings attributable to The Estée Lauder Companies Inc. per common share:
Basic $ 1.16 $ 1.03 13 % $ 1.93 $ 1.74 11 %
Diluted 1.13 1.00 13 % 1.89 1.70 11 %
 
Weighted average common shares outstanding:
Basic 387.4 386.8 387.6 388.7
Diluted 394.7 395.2 395.1 397.3
 
 

(A) In February 2009, the Company announced the implementation of a multi-faceted cost savings program (the “Program”) to position it to achieve long-term profitable growth. As of December 31, 2012, the Company closed the Program. As a result of the closure of the Program and evaluation of the initiatives that have been implemented as of December 31, 2012, the Company anticipates total cumulative restructuring charges and other costs to implement those initiatives to total between $325 million and $350 million, before taxes. Since the inception of the Program, the Company approved cost savings initiatives to resize the organization, reorganize certain functions, turnaround or exit unprofitable operations and outsource certain services.

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