PHILANTHROPY: GLOBAL AND LOCAL

The philanthropic history of ELC began with our founding family's determination to benefit the communities it served. Today, this commitment has become a powerful engine for good, an expression of our corporate concern for health and human services, the environment, education, the arts and individual enterprise. As philanthropists, we operate locally as well as globally, on micro as well as macro levels, benefiting individuals as well as entire populations.

In Fiscal Year 2006, ELC and its subsidiaries contributed more than $35 million, as well as more than $6 million in product donations.

• Breast Cancer Awareness and Research This is one of our top priorities. There is no way to calculate the number of lives that have been saved since 1993 by the efforts of ELC to promote early detection of breast cancer and fund clinical and diagnostic research. The Breast Cancer Research Foundation is the beneficiary of all proceeds from our internal fund-raising programs, the sale of specialized products and corporate giving. Since 1994, the combined efforts of The Estée Lauder Companies brands' Pink Ribbon products, employee fundraising activities, and the special Retail Partner initiatives, have contributed close to $27 million to The Breast Cancer Research Foundation.
• People Helping People "Bringing the Best to Everyone We Touch" is The Estée Lauder Companies' Vision Statement. Included in that vision is our role as responsible corporate citizens in the communities we serve. We are proud to support a multitude of institutions and programs that reflect the interests and concerns of our employees and customers, and that we feel best respond to the most pressing needs in our communities. In addition to corporate philanthropy in the form of funding, we provide product contributions and numerous other resources.

The Estée Lauder Companies has a thriving Employee Volunteer Program. Employees are given the opportunity to contribute their time, enthusiasm and talents to a number of causes, including the NYC Public Schools, Coalition for the Homeless, The Fresh Air Fund, New Alternatives for Children, Breast Cancer Awareness and many more. In 2006, more than 50% of our employees participated in at least one of our programs.

• Aveda Earth Month Every April, Aveda aligns with organizations promoting clean air, clean water and other environmental priorities in a month-long global campaign to raise awareness and participation. For more information, please visit http://aveda.aveda.com/protect/you/earthmonthpartners.asp
• Materials for the Arts The Estée Lauder Companies supports this vibrant program that serves artists, educators and community organizations throughout New York City. By donating computers, office equipment and art supplies it no longer needs, ELC reduces waste and landfill while helping to nurture education and the arts.
• Origins Natural Resources will support the Bashat (CBF) organization through the United Kingdom charity Fauna & Flora International. This initiative will help protect the snow leopard cubs in the Tien Shan (Heavenly) Mountains that are being driven from their natural habitat.
• Origins Natural Resources also continues to increase its support of integrative health and wellness by building strong partnerships with not-for-profit organizations that share similar beliefs. Origins Natural Resources joined forces with Project Sunshine in 2005 to develop the Origins Oasis by Project Sunshine, a not-for-profit organization that provides free social, educational and recreational programs to children and families affected by medical challenges.
• Bobbi Brown As part of her commitment to help women realize their fullest potential, Bobbi Brown, President of the ELC brand that bears her name, supports organizations like Dress for Success and the Jane Addams Vocational High School. She has helped to raise more than $500,000 through direct and in-kind donations for Dress for Success since her involvement began in 2001. Every year, she serves as Principal for a Day with the Jane Addams Vocational High School in addition to providing mentors for students and products for various school programs.
• The Ojon Corporation limits the annual harvest to protect the natural resources and ensure authenticity. Wild-crafted Ojon oil continues to be harvested and extracted by hand in the traditional way as a guarantee of purity. The Tawira tribes are consulted on all aspects of the business-from product development to marketing. A portion of the profits from the sale of Ojon goes directly to the Tawira Indian tribes in Central America. This portion helps the Tawira preserve their traditional lifestyle and the region's rainforests.

M·A·C Cosmetics has raised $100 million worldwide for the M·A·C AIDS Fund, a pioneer in HIV/AIDS funding that supports organizations working with underserved regions and communities worldwide. M·A·C Cosmetics generously donates 100% of the selling price of its Viva Glam lipsticks and lipglasses to the Fund. Please visit www.macaidsfund.org for more information.

COMMITMENTS TO OUR WORKERS
ELC takes pride in being an employer that rewards people for ability and achievement, regardless of race, gender, religion, age or sexual orientation. Every ELC employee, from top executives to the people who develop our products, run our production lines, plan our marketing and sell at our counters, is a valued resource. We have pledged to provide safe, healthy working environments for all and to maintain conditions that foster job satisfaction. Beyond these basics, we offer many opportunities for our employees to improve themselves, their positions and their world.

In Fiscal Year 2006, more than 2,300 employees of all levels received professional development training through the 40-plus programs that are offered free of charge to employees. Our President and CEO firmly believes that "To Lead Is to Teach" and encourages all of our senior management to support our Global Management Strategies Programs by taking the time to teach a course.

A corporate Diversity Officer has been named to generate programs that give minority employees the tools to fulfill their potential within the Company. A special Coach Me program brings executive level coaching to women early in their careers, teaching them the subtle skills and unwritten rules necessary for advancement and helping them realize their professional aspirations. A series of Diversity Focus Groups was held earlier this year. A Diversity Talent Management program offers senior managers guidelines for hiring, developing and promoting promising candidates from all backgrounds.