Estee Lauder 2002 Annual Report Download - page 79

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THEEST{E LAUDER COMPANIES INC.
INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Stockholders
The Estée Lauder Companies Inc.:
We have audited the accompanying consolidated balance sheet of The Estée Lauder Companies Inc. and subsidiaries as
of June 30, 2002, and the related consolidated statements of earnings, stockholders’ equity and comprehensive income
and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of The Estée Lauder Companies Inc. and subsidiaries as of June 30, 2002, and the results of their operations and
their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States
of America.
As discussed in Note 2, the Company adopted Statement of Financial Accounting Standards (“Statement”) No. 141,
“Business Combinations”, and Statement No. 142, “Goodwill and Other Intangible Assets”, in the year ended
June 30, 2002.
The consolidated balance sheet of The Estée Lauder Companies Inc. and subsidiaries as of June 30, 2001, and the related
consolidated statements of earnings, stockholders’ equity and comprehensive income, and cash flows for the years
ended June 30, 2001 and 2000, were audited by other auditors who have ceased operations. As described in Note 2,
these consolidated financial statements have been revised to include the transitional disclosures required by Statement
No. 142, “Goodwill and Other Intangible Assets”, which was adopted by the Company as of July 1, 2001. We performed
the following audit procedures with respect to the disclosures in Note 2 with respect to 2001 and 2000. We (i) agreed the
net income as previously reported and the adjustments to reported net income representing amortization expense
(including any related tax effects) recognized in those periods related to goodwill that is no longer being amortized as
a result of initially applying Statement No. 142 to the Company’s underlying records obtained from management, and
(ii) tested the mathematical accuracy of the reconciliation of adjusted net income to reported net income, and the related
earnings per share amounts. In our opinion, the disclosures for 2001 and 2000 in Note 2 are appropriate. However, we
were not engaged to audit, review, or apply any procedures to the 2001 and 2000 financial statements of the Company
other than with respect to such disclosures and, accordingly, we do not express an opinion or any other form of assurance
on the 2001 and 2000 consolidated financial statements taken as a whole.
New York, New York
August 9, 2002
78