NOTE 20 – SEGMENT DATA AND RELATED INFORMATION

Reportable operating segments include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the “Chief Executive”) in deciding how to allocate resources and in assessing performance. As a result of the similarities in the manufacturing, marketing and distribution processes for all of the Company’s products, much of the information provided in the consolidated financial statements is similar to, or the same as, that reviewed on a regular basis by the Chief Executive. Although the Company operates in one business segment, beauty products, management also evaluates performance on a product category basis.

While the Company’s results of operations are also reviewed on a consolidated basis, the Chief Executive reviews data segmented on a basis that facilitates comparison to industry statistics. Accordingly, net sales, depreciation and amortization, and operating income are available with respect to the manufacture and distribution of skin care, makeup, fragrance, hair care and other products. These product categories meet the definition of operating segments and, accordingly, additional financial data are provided below. The “other” segment includes the sales and related results of ancillary products and services that do not fit the definition of skin care, makeup, fragrance and hair care.

Product category performance is measured based upon net sales before returns associated with restructuring and other activities, and earnings before income taxes, interest expense, interest income and investment income, net, and charges associated with restructuring and other activities. Returns and charges associated with restructuring and other activities are not allocated to the product categories because they result from activities that are deemed a Company-wide initiative. The accounting policies for the Company’s reportable segments are the same as those described in the summary of significant accounting policies, except for depreciation and amortization charges, which are allocated, primarily, based upon net sales. The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements; thus, no additional information is produced for the Chief Executive or included herein.

	Year Ended June 30
(In millions)	2018			2017			2016
PRODUCT CATEGORY DATA
Net Sales:
Skin Care	$	5,595		$	4,527		$	4,446
Makeup	5,633			5,054			4,702
Fragrance	1,826			1,637			1,487
Hair Care	570			539			554
Other	67			69			74

	13,691			11,826			11,263
Returns associated with restructuring and other activities	(8		)	(2		)	(1		)

Net Sales	$	13,683		$	11,824		$	11,262



Depreciation and Amortization:
Skin Care	$	185		$	161		$	151
Makeup	255			218			184
Fragrance	64			59			52
Hair Care	24			23			24
Other	3			3			4

	$	531		$	464		$	415



Operating Income (Loss) before charges associated with restructuring and other activities:
Skin Care	$	1,511		$	1,014		$	842
Makeup	549			713			758
Fragrance	176			115			87
Hair Care	64			51			52
Other	9			11			5

	2,309			1,904			1,744
Reconciliation:
Charges associated with restructuring and other activities	(257		)	(212		)	(134		)
Interest expense	(128		)	(103		)	(71		)
Interest income and investment income, net	56			28			16

Earnings before income taxes	$	1,980		$	1,617		$	1,555

	Year Ended or at June 30
(In millions)	2018			2017			2016
GEOGRAPHIC DATA(1)
Net Sales:
The Americas	$	5,015		$	4,819		$	4,710
Europe, the Middle East & Africa	5,634			4,650			4,381
Asia/Pacific	3,042			2,357			2,172

	13,691			11,826			11,263
Returns associated with restructuring and other activities	(8		)	(2		)	(1		)

Net Sales	$	13,683		$	11,824		$	11,262


Operating Income (Loss):
The Americas	$	211		$	284		$	346
Europe, the Middle East & Africa	1,523			1,203			1,027
Asia/Pacific	575			417			371

	2,309			1,904			1,744
Charges associated with restructuring and other activities	(257		)	(212		)	(134		)

Operating Income	$	2,052		$	1,692		$	1,610


Total Assets:
The Americas	$	7,558		$	7,061		$	5,423
Europe, the Middle East & Africa	3,855			3,367			3,016
Asia/Pacific	1,154			1,140			784

	$	12,567		$	11,568		$	9,223


Long-Lived Assets (property, plant and equipment, net):
The Americas	$	1,138		$	1,071		$	978
Europe, the Middle East & Africa	525			456			464
Asia/Pacific	160			144			141

	$	1,823		$	1,671		$	1,583

(1) The net sales from the Company’s travel retail business are included in the Europe, the Middle East & Africa region.

Net sales are predominantly attributed to a country within a geographic region based on the location of the customer. The Company is domiciled in the United States. Net sales in the United States, including net sales from travel retail locations, in fiscal 2018, 2017 and 2016 were $4,531 million, $4,368 million and $4,279 million, respectively. Net sales in China, including net sales from travel retail locations, in fiscal 2018, 2017 and 2016 were approximately 13%, 9% and 9% of consolidated net sales, respectively, and no other country represented greater than 10% of the Company’s consolidated net sales. The Company’s long-lived assets in the United States at June 30, 2018, 2017 and 2016 were $912 million, $869 million and $862 million, respectively.