ENVIRONMENTAL AND SAFETY PERFORMANCE (page 1/2)

ELC's Global Environmental Affairs and Safety Department is responsible for working with departments within the Company to ensure that we run our business in an environmentally friendly and socially responsible manner, as well as to maximize the safety and well-being of our employees. We offer many wellness programs for our employees around the world, ranging from free mammograms to weight loss and preventative care.

Our Fiscal Year 2006 Management Review on Environmental Affairs and Safety provides quantitative and qualitative data on our programs and progress in many areas. The full Review, including the Company's performance in meeting its environmental and safety objectives and goals for 2007, is available at: www.elcompanies.com/citizenship/citizenship.asp

Unless otherwise noted, the information in the report refers to The Estée Lauder Companies' Global Operations facilities. We are currently in the midst of expanding some of the programs piloted in our main facilities to cover all of the Company's businesses.

ENERGY CONSERVATION
Overall our energy use has increased due to the construction of new distribution centers and the continued automation of our manufacturing processes. However, projects launched as part of our Energy Conservation Program have reduced the Company's energy usage by over 84,000,000 kWh in total- a reduction of over 52,000 tons of CO2 equivalent from the atmosphere. We have reduced our annual electricity use by over 15.9 million kWh. This is a savings of over $1.5 million dollars per year.

AIR EMISSIONS
All of our facilities are in compliance with regulatory limits for air emissions. Since we utilize low amounts of EPA-regulated hazardous materials in our operations, our air emissions are minimal. We continue to evaluate our equipment and new processes to ensure that we conduct our operations with respect for the environment.

WATER CONSERVATION
The Estée Lauder Companies has implemented many programs to reduce water use in our cleaning processes. These include the use of spray-ball technologies in our cream and lotion manufacturing facilities and water-free cleaning processes at our powder sites. Our Environmental Performance indicator tracking wastewater discharge per kilogram produced increased slightly in Fiscal Year 2006 because of a management decision to reduce batch size leading to more cleaning cycles. This is due, in part, to the unique nature of certain of our products, which require special manufacturing conditions.

GREENHOUSE GAS EMISSIONS
Greenhouse gas (GHG) emissions from direct and indirect energy usage at our Global Operations' facilities and employee business travel were estimated to be 53,000 metric tons in Fiscal Year 2006. We plan to calculate the complete carbon footprint of the Company and develop goals for reduction by increasing the efficiency of our operations and through the optimization of our incoming and outgoing materials shipments and use of renewable energy sources.

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