Estee Lauder 2005 Annual Report Download - page 43

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THE EST{E LAUDER COMPANIES INC.
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 2005, 2004 and 2003
and reflects the basis of presentation described in Note 2 and Note 17 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. Based on an
assessment of the tangible and intangible assets of this business, we determined that the carrying amount of these assets as
then reflected on our consolidated balance sheets exceeded their estimated fair value. Accordingly, we recorded an after-
tax charge to discontinued operations of $33.3 million for the fiscal year ended June 30, 2004. The charge represented the
impairment of goodwill in the amount of $26.4 million, the reduction in value of other tangible assets of $2.1 million, net of
tax, and the operating loss of $4.8 million, net of tax, for the fiscal year ended June 30, 2004. Included in that operating loss
were additional costs associated with the sale and discontinuation of the business. All consolidated statement of earnings
information for fiscal 2003 has been restated for comparative purposes, including restatement of the makeup product
category and the Americas region data.
YEAR ENDED JUNE 30 2005 2004 2003
(In millions)
NET SALES
By Region:
The Americas $3,382.2 $3,148.8 $2,931.8
Europe, the Middle East & Africa 2,118.6 1,870.2 1,506.4
Asia/Pacific 835.5 771.4 657.8
$6,336.3 $5,790.4 $5,096.0
By Product Category:
Skin Care $2,352.1 $2,140.1 $1,893.7
Makeup 2,423.1 2,148.3 1,887.8
Fragrance 1,260.6 1,221.1 1,059.6
Hair Care 273.9 249.4 228.9
Other 26.6 31.5 26.0
$6,336.3 $5,790.4 $5,096.0
OPERATING INCOME
By Region:
The Americas $ 357.2 $ 319.2 $ 255.3
Europe, the Middle East & Africa 306.1 274.4 227.7
Asia/Pacific 57.3 50.4 42.7
720.6 644.0 525.7
Special Charges* —— (22.0)
$ 720.6 $ 644.0 $ 503.7
By Product Category:
Skin Care $ 365.8 $ 336.3 $ 273.2
Makeup 294.9 257.7 206.6
Fragrance 35.8 24.8 32.1
Hair Care 22.8 23.6 14.8
Other 1.3 1.6 (1.0)
720.6 644.0 525.7
Special Charges* —— (22.0)
$ 720.6 $ 644.0 $ 503.7
*Refer to the following discussion in “Fiscal 2004 as Compared with Fiscal 2003—Operating Expenses” for further information regarding these charges.
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