Estee Lauder 2004 Annual Report Download - page 43

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THE EST{E LAUDER COMPANIES INC.41
RESULTS OF OPERATIONS
We manufacture, market and sell skin care, makeup, fragrance and hair care products which are distributed in over 130
countries and territories. The following table is a comparative summary of operating results for fiscal 2004, 2003 and
2002 and reflects the basis of presentation described in Note 2 and Note 18 to the Notes to Consolidated Financial
Statements for all periods presented. Products and services that do not meet our definition of skin care, makeup, fragrance
and hair care have been included in the “other” category.
In February 2004, we sold the assets and operations of our reporting unit that sold jane brand products. Prior to the sale
of the business, in December 2003, we committed to a plan to sell such assets and operations. At the time the decision
was made, circumstances warranted that we conduct an assessment of the tangible and intangible assets of the jane
business. Based on our assessment, we determined that the carrying amount of these assets as then reflected on our
consolidated balance sheet exceeded their estimated fair value. In accordance with the assessment and the closing of the
sale, we 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 tangi-
ble 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 the prior years presented have been restated for
comparative purposes, including the restatement of the makeup product category and the Americas region data.
YEAR ENDED JUNE 30 2004 2003 2002
(In millions)
NET SALES
By Region:
The Americas $3,148.8 $2,931.8 $2,846.0
Europe, the Middle East & Africa 1,870.2 1,506.4 1,261.1
Asia/Pacific 771.4 657.8 610.6
5,790.4 5,096.0 4,717.7
Restructuring* —— (6.2)
$5,790.4 $5,096.0 $4,711.5
By Product Category:
Skin Care $2,140.1 $1,893.7 $1,703.3
Makeup 2,148.3 1,887.8 1,758.3
Fragrance 1,221.1 1,059.6 1,017.3
Hair Care 249.4 228.9 215.8
Other 31.5 26.0 23.0
5,790.4 5,096.0 4,717.7
Restructuring* —— (6.2)
$5,790.4 $5,096.0 $4,711.5
OPERATING INCOME
By Region:
The Americas $ 319.2 $ 255.3 $ 222.8
Europe, the Middle East & Africa 274.4 227.7 179.9
Asia/Pacific 50.4 42.7 56.0
644.0 525.7 458.7
Restructuring and Special Charges* —(22.0) (116.6)
$ 644.0 $ 503.7 $ 342.1
By Product Category:
Skin Care $ 336.3 $ 273.2 $ 248.4
Makeup 257.7 206.6 183.1
Fragrance 24.8 32.1 13.4
Hair Care 23.6 14.8 13.7
Other 1.6 (1.0) 0.1
644.0 525.7 458.7
Restructuring and Special Charges* —(22.0) (116.6)
$ 644.0 $ 503.7 $ 342.1
*Refer to the following tables and discussion for further information regarding these charges.