TO THE FUTURE

This Report is the first step in demonstrating how far The Estée Lauder Companies has come, as well as a roadmap for our journey toward a sustainable future. In the months and years ahead, we look forward to publishing updates that outline our progress as a Company and as stewards of the Earth.

ELC is currently implementing our Strategic Modernization Initiative to help transform our business, enhance shareholder value and support the goal of aggressive, sustainable growth by integrating the Company across brands and regions. This will help us align all of our business units by increasing efficiencies and communication while reducing waste and fostering process and technology improvements across the organization.

Our Corporate Social Responsibility (CSR) program goals are to continue to develop, market and sell the world's finest beauty and personal care products in a manner that meets or exceeds all legal requirements, ensures the safety and well-being of our employees and customers and leaves no long-term negative environmental impact.

Among our key objectives is a definition of what sustainability means for each department and a Company-wide calculation of every department's sustainability "footprint." Based on this "map," we can work more precisely and effectively to continue to improve our interaction with the environment and our stakeholders.

GOALS
The Estée Lauder Companies is committed to protecting the environment and the communities in which we operate by striving for excellence and the continuous improvement of our operations.

Our environmental efforts increase the efficiency of our operations by minimizing waste and help maintain our businesses viability for the future. We have recently joined the United States Environmental Protection Agency's Climate Leaders Program to help further quantify our Carbon Footprint and implement realistic goals and measures to ensure that we can continue to reduce our greenhouse gas emissions in line with our expanding business. We hope to publish our global greenhouse gas emission reduction goals in 2008.

We intend to convert every ELC Global Operations facility to green-powered electricity by the end of 2007. Every new factory, office and distribution center we construct in the future will be based on a green design philosophy.

We are implementing a new packaging roadmap based on the Sustainable Packaging Coalition's definition of sustainable packaging. It will drive our design and sourcing decisions and allow us to set goals and monitor our progress going forward.

The Estée Lauder Companies believes that our packaging must be beneficial and safe for individuals and communities throughout its life. Our environmental goal is to design our packaging so that it:

• Meets marketing criteria for performance and cost
• Is sourced, manufactured, transported and recycled using renewable energy
• Maximizes the use of renewable and recycled source materials
• Is manufactured using clean production technologies and best practices
• Is physically designed to optimize materials and energy
• Can be effectively recovered for re-use as a resource after our product has been consumed

We have challenged our Global Operations facilities to raise the overall recycling rate to 60% within the next five years.

We have challenged our facilities to develop programs that will lower our Total Incident Rate to 1.0 within the next five years.

We are strengthening our supplier oversight programs to further ensure that they meet our standards for worker rights, occupational safety and environmental performance.

We will continue to develop our Employee Wellness Programs in order to improve the health and well-being of our employees, improve morale and productivity, reduce healthcare and lost time costs and improve the bottom-line performance of our Company.

The ultimate objectives of our CSR programs are Zero Waste (100% efficiency of energy, material and human resources) and Zero Accidents.

LAST WORD

Our long-term challenges include maintaining the proper balance between environmental, social and economic goals while assessing the effects of climate change on our operations, the decreasing availability of natural resources for fuel, packaging and ingredients, and the ever-changing regulatory environment associated with new and innovative ingredients. By doing our best to overcome these and other obstacles we will continue to allow future generations to feel and be beautiful as The Beauty of Sustainability continues to be our guiding light.

For more information on corporate responsibility and sustainability for The Estée Lauder Companies, please contact us at-thebeautyofsustainability@estee.com