Lease termination period

[Table of Contents](#i2ba0bd92bcb14d27a1d59d9667569d45_7)THE ESTÉE LAUDER COMPANIES INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 7 – LEASESFor further information on the Company's policies relating to leases see Note 2 – Summary of Significant Accounting Policies.The Company has operating and finance leases primarily for real estate properties, including corporate offices, facilities to support the Company’s manufacturing, assembly, research and development and distribution operations and retail stores, as well as information technology equipment, automobiles and office equipment, with remaining terms of approximately 1 year to 58 years. Some of the Company’s lease contracts include options to extend the leases for up to 30 years, while others include options to terminate the leases within 23 years.A summary of total lease costs and other information for the periods relating to the Company’s finance and operating leases is as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | June 30 |
| (In millions) |  | 2022 |  | 2021 |  | 2020 |
| Total lease cost |  |  |  |  |  |  |
| Finance lease cost: |  |  |  |  |  |  |
| Amortization of right-of-use assets |  | $ | 12  |  |  | $ | 9  |  |  | $ | 11  |  |
| Interest on lease liabilities |  | —  |  |  | —  |  |  | 1  |  |
| Operating lease cost |  | 465  |  |  | 470  |  |  | 625  |  |
| Short-term lease cost |  | 24  |  |  | 19  |  |  | 24  |  |
| Variable lease cost |  | 332  |  |  | 301  |  |  | 158  |  |
| Total |  | $ | 833  |  |  | $ | 799  |  |  | $ | 819  |  |
| Other information |  |  |  |  |  |  |
| Cash paid for amounts included in the measurement of lease liabilities |  |  |  |  |  |  |
| Operating cash flows from operating leases |  | $ | 506  |  |  | $ | 451  |  |  | $ | 426  |  |
| Financing cash flows from finance leases |  | $ | 18  |  |  | $ | 12  |  |  | $ | 12  |  |
| Right-of-use assets obtained in exchange for new operating lease liabilities |  | $ | 279  |  |  | $ | 267  |  |  | $ | 266  |  |
| Right-of-use assets obtained in exchange for new finance lease liabilities |  | $ | 10  |  |  | $ | 44  |  |  | $ | 1  |  |
| Weighted-average remaining lease term – finance leases |  | 3 years |  | 3 years |  | 2 years |
| Weighted-average remaining lease term – operating leases |  | 9 years |  | 10 years |  | 11 years |
| Weighted-average discount rate – finance leases |  | 1.0  | % |  | 1.1  | % |  | 2.7  | % |
| Weighted-average discount rate – operating leases |  | 2.4  | % |  | 2.3  | % |  | 2.5  | % |

  
  
  
  
  
  
  
  
  
  
  
F-32
