Forward Looking Statements

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2 Forward Looking Statements We and our representatives from time to time make written or oral forward-looking statements, including statements contained in this and other filings with the Securities and Exchange Commission, in our press releases and in our reports to stockholders. The words and phrases will likely result, expect, believe, planned, may, should, could, anticipate, estimate, project or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These statements include, without limitation, our expectations regarding sales, earnings or other future financial performance and liquidity, product introductions, entry into new geographic regions, information systems initiatives, new methods of sale and future operations or operating results. Although we believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, actual results may differ materially from our expectations. Factors that could cause actual results to differ from expectations include, without limitation: (1) increased competitive activity from companies in the skin care, makeup, fragrance and hair care businesses, some of which have greater resources than we do; (2) our ability to develop, produce and market new products on which future operating results may depend and to successfully address challenges in our core brands, including gift with purchase, and in our fragrance business; (3) consolidations, restructurings, bankruptcies and reorganizations in the retail industry causing a decrease in the number of stores that sell our products, an increase in the ownership concentration within the retail industry, ownership of retailers by our competitors or ownership of competitors by our customers that are retailers; (4) destocking by retailers; (5) the success, or changes in timing or scope, of new product launches and the success, or changes in the timing or the scope, of advertising, sampling and merchandising programs; (6) shifts in the preferences of consumers as to where and how they shop for the types of products and services we sell; (7) social, political and economic risks to our foreign or domestic manufacturing, distribution and retail operations, including changes in foreign investment and trade policies and regulations of the host countries and of the United States; (8) changes in the laws, regulations and policies (including the interpretations and enforcement thereof) that affect, or will affect, our business, including those relating to our products, changes in accounting standards, tax laws and regulations, trade rules and customs regulations, and the outcome and expense of legal or regulatory proceedings, and any action we may take as a result; (9) foreign currency fluctuations affecting our results of operations and the value of our foreign assets, the relative prices at which we and our foreign competitors sell products in the same markets and our operating and manufacturing costs outside of the United States; (10) changes in global or local conditions, including those due to natural or man-made disasters, real or perceived epidemics, or energy costs, that could affect consumer purchasing, the willingness or ability of consumers to travel and/or purchase our products while traveling, the financial strength of our customers or suppliers, our operations, the cost and availability of capital which we may need for new equipment, facilities or acquisitions, the cost and availability of raw materials and the assumptions underlying our critical accounting estimates; (11) shipment delays, depletion of inventory and increased production costs resulting from disruptions of operations at any of the facilities that manufacture nearly all of our supply of a particular type of product (i.e., focus factories) or at our distribution or inventory centers; (12) real estate rates and availability, which may affect our ability to increase the number of retail locations at which we sell our products and the costs associated with our other facilities; (13) changes in product mix to products which are less profitable; (14) our ability to acquire, develop or implement new information and distribution technologies, including those related to our Strategic Modernization Initiative, on a timely basis and within our cost estimates; (15) our ability to capitalize on opportunities for improved efficiency, such as publicly-announced cost-savings initiatives and the success of Stila under new ownership, and to integrate acquired businesses and realize value therefrom; (16) consequences attributable to the events that are currently taking place in the Middle East, including terrorist attacks, retaliation and the threat of further attacks or retaliation; (17) the timing and impact of acquisitions and divestitures, which depend on willing sellers and buyers, respectively; and (18) additional factors as described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended June 30, We assume no responsibility to update forward-looking statements made herein or otherwise.

3 Fiscal 2007 Expectations Reported Sales +8% - 9% Foreign Exchange +2% Operating Margin Relatively flat EPS (from continuing operations) $ $2.20

4 Growth Heritage $ Billions $ E

5 Geographic Mix Total Market Prestige Business The Estée Lauder Companies 31% 31% 26% 38% 38% 36% 14% 35% 51% $121 Billion $39 Billion $7 Billion Americas Europe Asia Source: Euromonitor 2006, Generation 2005, ELC data given for FY2007 Estimate. Total market excludes baby care, bath and shower, deodorants, oral hygiene and depilatories.

6 Category Mix Total Market Prestige Business The Estée Lauder Companies 30% 36% 14% 20% 26% 13% 23% 38% 6% 18% 39% 37% $121 Billion $39 Billion $7 Billion Skin Care Makeup Fragrance Hair Care Source: Euromonitor 2006, Generation 2005, ELC data given for FY2007 Esitmate. Total market excludes baby care, bath and shower, deodorants, oral hygiene and depilatories.

7 Competitive Landscape Formidable Competitors U.S.: Lancôme, Chanel, Benefit Europe: Lancôme, Clarins, Chanel, LVMH Asia: Shiseido, Kao, SK-II Mass versus Class ELC Share of Prestige United States 41% Europe 11% Asia / Pacific 14% Source: Euromonitor, Generations, NPD Beauty Trends, European Forecasts, ELC estimates

8 How ELC Stays Competitive Key Pillars Investing in R&D to drive product innovation World-class marketing and promotion strategies Delivering industry-leading point-of-sale service Diversified channel and geographic reach

9 Research & Development Strengths: Strong scientific expertise Investing in R&D effectively Successes: Worldwide facilities Strategic collaborations

10 Strategic Collaborations Strengths: R&D collaborations with universities, hospitals and research centers globally Access to supplier developments Successes: Innovation keeps ELC competitive Multiple new product awards The Weill Cornell Ambulatory Care and Medical Education Building, which houses the Clinique Skin Wellness Center

11 Marketing & Promotion Strengths: Innovative consumer outreach Distinctive advertising campaigns Successes: Alternative media Numerous packaging awards

12 Leadership in Skin Care

13 Leadership in Makeup

14 Presence in Fragrance

15 Nurture Hair Care ELC brings new competitive dynamic to the salon business Direct service and distribution to salons High price points Selective distribution - Highest door productivity - High share per distribution point Unique and strong brand equities

16 Point-of-Sale Service Strengths: More than 62,000 sales representatives worldwide Extensive education and training 20% to 22% of sales Successes: Service vs. self-service

17 Diversified Distribution Strengths: Solid leadership in traditional channel Expanding into new channels Successes: Luxury specialty stores Free standing stores Internet Travel retail

18 Five Strategic Imperatives Optimizing Brand Portfolio Strengthening Product Categories Expanding Geographic Presence Diversifying Distribution Achieving Operational and Cost Excellence

19 The Way Forward Optimize Grow People & Culture Diversify

20 Optimize Brand portfolio Strengthen core brands Maximize high growth brands Incubate and acquire next generation brands Divest non-strategic brands

21 Optimize Estée Lauder brand Strong international growth Improved brand image Tom Ford Gwyneth Paltrow Re-Nutriv, Advanced Night Repair driving high-profit growth Lower SRP to attract new consumers US stabilizing

22 Optimize Clinique brand Strong international growth Japan turnaround Emerging markets US stabilizing Attracting new consumers Alternative distribution New / alternative media Enhanced consumer experience

23 Optimize High-growth brands - # of countries and territories Int l % of sales 21% 25% 51% 54% 67% 70% 30% % 76 Aveda Bobbi Brown La Mer MAC E 2010E

24 Optimize Operations and cost structure SAVINGS SMI Indirect procurement Supply chain improvements Distribution realignment Eurovision REINVESTMENT Marketing / awareness for new brands Geographic expansion Advertising / brand building Global infrastructure and technology Start up ventures / new brand development Talent / people

25 Diversify Sales Target consumers Countries Consumer outreach Distribution channels

26 Diversify Reaching new consumers Ethnic consumers 30% of M A C s North American business Daisy Fuentes Prescriptives Custom Blend Appropriate counter experience

27 Diversify International countries - % of sales 43% 51% Other Int'l Australia Italy Germany France Korea Canada Spain Japan Travel Retail UK E

28 Diversify Alternative communication channels

29 Diversify Channels Distribution mix 5% 4% 7% 5% 12% 8% 6% 7% 7% 10% 7% 8% 7% Other Salons/Spas 21% 15% 15% Retail Stores 23% 24% Travel Retail Perfumeries 46% 34% 29% Int l Dept. Stores E 2010E N.A. Dept Stores

30 Grow Maximize international opportunities Strengthen core brands Develop fast-growing brands Enhance performance in existing channels Enter alternative channels Make strategic acquisitions

31 Grow Maximize international opportunities E 2010E 13% 26% 14% 35% 16% 35% 61% 51% 49% Americas Europe, Middle East & Africa Asia/Pacific

32 Grow Why focus on International growth? Large opportunity, market share acquisition, new horizons Luxury, prestige brands play well globally Better profit margin in general Strong brand recognition exists already Ability to leverage and build upon International organization

33 Grow Net Sales Matrix by Brand Fiscal Year 07 Estimate % % Domestic International Darphin ADF La Mer Jo Malone EL CL BB Tom Ford MAC OR Aveda Sean John

34 Grow Net Sales Matrix by Brand 2010 Estimate % % Domestic International Darphin ADF La Mer Jo Malone EL Tom Ford CL BB Sean John MAC OR Aveda

35 Grow Continue investing in key long-term growth countries Europe, Middle East & Africa: Asia / Pacific: South Africa Central Europe North & South Russia Turkey India Middle East China Vietnam Indonesia Latin America: Brazil Colombia Mexico

36 Grow Enter / leverage emerging markets China 2002: Two brands 20 counters 6 cities $6m net sales Heavy investment China Today: Eight brands 267 counters 31 cities Approx. $90m net sales Turning profitable

37 Japan Korea China Net sales since start-up Years Since Start-up Japan 1970 Korea 1994 China

38 Grow Acquire / develop new brands Proactive courting Ongoing tracking Opportunistic consideration In discussions with ~10 high-potential companies at any given time Actively monitor ~60 companies, periodically assessing their fit with ELC s strategic imperatives and screening criteria At minimum, look into all beauty companies that are available for sale

39 Well Positioned for the Future Investing in the business to drive solid and consistent growth over the long-term Fostering a highly disciplined organization focused on growing efficiently and profitably Exploring multiple avenues for growth and focused in particular on maximizing the international opportunity Expecting to grow faster than the industry over the next three years

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