Dear Stockholders:

It's hard to find any company today that does not call itself global or frame its strategies with terms like globalization. And the reason is obvious. In a world wired for a new age of communication and commerce, a growth business is a global business. It's really that simple.

But there is nothing simple at all about creating the kind of company that can grow globally. It takes an organization with the experience, the systems, the products and the leadership to see opportunity accurately and move on it quickly.

At the Estée Lauder Companies, that capability centers on three overarching advantages. It's the distribution diversification to get our different brands to consumers in many places through many outlets. It's a stable of emerging brands that we can move into new markets, adding exciting growth to the core sales of our more established brands. And it's our proven ability to create global brands-brands with a message and an image that cross borders, cultures and demographics.

In this year's report, I want to take a close look at how each of these advantages shapes and defines our global business and the moves we're making to fine-tune the engine of global growth.

At the heart of our global advantage is history.

We have been building our international presence since 1960, when we entered Europe - a time when many said the post-war economies were not strong enough to support prestige consumer products growth, particularly items like cosmetics. We saw the hunger for small luxuries that would come with economic improvement. And we were right. We repeated the process of early entry into Asia when we entered Hong Kong well in advance of the region's economic boom. We saw incredible growth in demand that would come from new affluence. We were right again. We were the first American cosmetics company to enter the former Soviet Union and recently launched Clinique in Vietnam. We also see great opportunity for future growth in Latin America.