Weighted-average ultimate trend rate (as a percent)

[Table of Contents](#i2ba0bd92bcb14d27a1d59d9667569d45_7)THE ESTÉE LAUDER COMPANIES INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe discount rate for each plan used for determining future net periodic benefit cost is based on a review of highly rated long-term bonds. The discount rate for the Company’s Domestic Plans is based on a bond portfolio that includes only long-term bonds with an Aa rating, or equivalent, from a major rating agency. The Company used an above-mean yield curve which represents an estimate of the effective settlement rate of the obligation, and the timing and amount of cash flows related to the bonds included in this portfolio are expected to match the estimated defined benefit payment streams of the Company’s Domestic Plans. For the Company’s international plans, the discount rate in a particular country was principally determined based on a yield curve constructed from high quality corporate bonds in each country, with the resulting portfolio having a duration matching that particular plan. In determining the long-term rate of return for a plan, the Company considers the historical rates of return, the nature of the plan’s investments and an expectation for the plan’s investment strategies.The weighted-average interest crediting rate used to determine the benefit obligation and net periodic benefit cost relating to the Company’s U.S. Retirement Growth Account Plan was 4.02% as of and for the years ended June 30, 2022 and 2021.   
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The assumed weighted-average health care cost trend rate for the coming year is 5.84% while the weighted-average ultimate trend rate of 4.03% is expected to be reached in approximately 18 years to 24 years.   
Amounts recognized in AOCI (before tax) as of June 30, 2022 are as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   |  | Pension Plans |  | Other thanPension Plans |  |   |
| (In millions) |  | U.S. |  | International |  | Post-retirement |  | Total |
| Net actuarial losses, beginning of year |  | $ | 198  |  |  | $ | 20  |  |  | $ | 27  |  |  | $ | 245  |  |
| Actuarial gains recognized |  | (13) |  |  | (31) |  |  | (27) |  |  | (71) |  |
| Amortization and settlements included in net periodic benefit cost |  | (15) |  |  | (2) |  |  | (1) |  |  | (18) |  |
| Translation adjustments |  | —  |  |  | —  |  |  | —  |  |  | —  |  |
| Net actuarial losses, end of year |  | 170  |  |  | (13) |  |  | (1) |  |  | 156  |  |
|  |  |  |  |  |  |  |  |  |
| Net prior service cost, beginning of year |  | 2  |  |  | (5) |  |  | —  |  |  | (3) |  |
| Amortization included in net periodic benefit cost |  | —  |  |  | 2  |  |  | —  |  |  | 2  |  |
| Net prior service cost, end of year |  | 2  |  |  | (3) |  |  | —  |  |  | (1) |  |
| Total amounts recognized in AOCI |  | $ | 172  |  |  | $ | (16) |  |  | $ | (1) |  |  | $ | 155  |  |

  
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the Company’s pension plans at June 30 are as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   |  | Pension Plans |  | Other than Pension Plans |
|   |  | Retirement GrowthAccount |  | Restoration |  | International |  | Post-retirement |
| (In millions) |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |
| Projected benefit obligation |  | $ | 811  |  |  | $ | 946  |  |  | $ | 111  |  |  | $ | 129  |  |  | $ | 562  |  |  | $ | 700  |  |  | $ | 177  |  |  | $ | 209  |  |
| Accumulated benefit obligation |  | $ | 777  |  |  | $ | 897  |  |  | $ | 100  |  |  | $ | 113  |  |  | $ | 507  |  |  | $ | 636  |  |  | $ | —  |  |  | $ | —  |  |
| Fair value of plan assets |  | $ | 838  |  |  | $ | 981  |  |  | $ | —  |  |  | $ | —  |  |  | $ | 579  |  |  | $ | 681  |  |  | $ | 14  |  |  | $ | 24  |  |

  
International pension plans with projected benefit obligations in excess of the plans’ assets had aggregate projected benefit obligations of $265 million and $369 million and aggregate fair value of plan assets of $156 million and $223 million at June 30, 2022 and 2021, respectively. International pension plans with accumulated benefit obligations in excess of the plans’ assets had aggregate accumulated benefit obligations of $95 million and $127 million and aggregate fair value of plan assets of $6 million and $5 million at June 30, 2022 and 2021, respectively.F-59
