Over the years, we’ve insisted on being the best innovators and coming to the marketplace first with new ideas. Hundreds of scientists in our laboratories collaborate with researchers at universities and medical institutions around the world to find breakthroughs in dermatology, biophysics, molecular biology, immunology and chemistry. Our research insights led to this year’s major launch of Clinique’s revolutionary and patent-pending Repairwear,which optimizes the skin’s natural repair processes while you sleep. We call the line’s three products (Repairwear Intensive Night Cream, Repairwear Intensive Night Lotion and Repairwear Extra Help Serum) the “Dream Team” — and they’ve been a dream come true for consumers and retailers alike. At the Estée Lauder brand, our scientists triumphed by creating the brand’s most technically advanced volumizing mascara: MagnaScopic Maximum Volume Mascara. Its newly patented formula builds up the lashes, magnifying them up to four times their original thickness, with- out weight or clumping, through a unique lofting complex called Expandex and its dedicated Speed-Meter Brush. Color is intensified by 30 percent. Mascara has become enormously competitive this year with one major magazine referring to “The Mascara Wars.” With our innovation, we are emerging as a leader in the mascara business. Our legacy in innovation — with our drive to be first to market — has given rise to a funny saying that I often hear around the industry: “Follow the Lauder.” Integrity and a high standard of ethics have always been cornerstones of our Company. Sadly, we’ve seen many major companies falter over the last couple of years because of lapses in integrity. At The Estée Lauder Companies, we strive to keep the precious faith of our stockholders, customers, suppliers, consumers and employees by always being fair, transparent and ethical. Our mission is to keep that founding vision alive and vibrant today. Our traditions are reinvigorated by attract- ing and retaining the best people, taking inspiration from ideas generated all over the world and holding  a leadership position in this dynamic industry. People want to come to work for The Estée Lauder Companies, and they want to stay. I believe our  retention rates far exceed the industry average. At our Company, most employees find more than a job — they find a home. KEEPING OUR “FOUNDING VISION” ALIVE TODAY WE DO NOT WAVER FROM OUR CORE PRINCIPLES OR CHOOSE A “FLAVOR - OF - THE - MONTH” SET OF MANAGEMENT PRIORITIES.  08