EX-12.1 3 a2235760zex-12_1.htm EX-12.1

Exhibit 12.1

 

The Estée Lauder Companies Inc.

Computation of Ratio of Earnings to Fixed Charges

(In millions, except ratio data)

 

 

 

Nine
Months
Ended
March 31,

 

Fiscal Year Ended June 30,

 

 

 

2018

 

2017

 

2016

 

2015

 

2014

 

2013

 

Fixed charges

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense(1)(2)

 

$

96

 

$

103

 

$

71

 

$

60

 

$

60

 

$

82

 

Imputed interest

 

64

 

68

 

83

 

76

 

58

 

48

 

Total fixed charges

 

160

 

171

 

154

 

136

 

118

 

130

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings available for fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

1,719

 

1,617

 

1,555

 

1,561

 

1,777

 

1,475

 

Less noncontrolling interests

 

(7

)

(7

)

(6

)

(5

)

(5

)

(4

)

Add fixed charges

 

160

 

171

 

154

 

136

 

118

 

130

 

Total earnings available for fixed charges

 

$

1,872

 

$

1,781

 

$

1,703

 

$

1,692

 

$

1,890

 

$

1,601

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges(3)

 

11.7x

 

10.4x

 

11.1x

 

12.4x

 

16.0x

 

12.3x

 

 

(1)         Fiscal 2013 interest expense includes pre-tax expense on the extinguishment of debt of $19 million.

 

(2)         Capitalized interest is excluded from interest expense as it is considered de minimis and does not materially impact the calculation.

 

(3)         The ratio of earnings to fixed charges has been computed by dividing earnings before income taxes plus fixed charges less noncontrolling interests by the fixed charges. This ratio includes the earnings and fixed charges of The Estée Lauder Companies Inc. (the “Company”) and its consolidated subsidiaries; fixed charges consist of interest and related charges on debt and the portion of rentals for real and personal properties in an amount deemed to be representative of the interest factor. Regulation S-K also requires the Company to add distributed income of equity investee and share of pre-tax losses of equity investees for which charges arising from guarantees to the earnings.  Prior to fiscal year 2016, the Company had insignificant equity investments, and the above earnings were not adjusted for the items mentioned in the previous sentence due to immaterial amounts for those items that would not have impacted the ratios. For the nine months ended March 31, 2018 and the fiscal year ended June 30, 2017, the Company recognized $14 million and $21 million, respectively, in equity method investment income, which is included in earnings before income taxes.