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The Procter & Gamble Company, which markets SK-II, Cover Girl, Olay, Giorgio Beverly Hills, Hugo Boss, Escada, Lacoste,
bruno banani, Ghost, Puma, Naomi Campbell, Infusium, Max Factor, Pantene, Clairol, Wella, Valentino, Aussie, Dolce &
Gabbana, DDF, Jean Patou, Rochas and other brands;
Revlon, Inc., which markets Revlon, Almay, Ultima, Flex and other brands;
Shiseido Company, Ltd., which markets Shiseido, Clé de Peau Beauté, Nars, Decléor, Issey Miyake, Jean Paul Gaultier, Carita,
Aupres, Qi and other brands;
Starwood Hotels & Resorts Worldwide, Inc., which markets Bliss; and
Unilever N.V., which markets Dove, Pond’s, Sunsilk, Vaseline, Lux, Axe and other brands.
We also face competition from a number of independent brands, such as dr. brandt, Frederick Fekkai, Kinerase, MD Skincare, Murad,
Obagi, Paul Mitchell, Paula Dorf, N.V. Perricone M.D., philosophy, Prevage MD, tarte, TIGI and Trish McEvoy.
Additionally, some retailers have developed their own beauty brands, such as:
• Gap Inc., which markets The Gap, Old Navy and Banana Republic products;
• Limited Brands Inc., which markets Victoria’s Secret Beauty and Bath and Body Works; and
• Sephora.
Some of our competitors also have ownership interests in retailers that are customers of ours. For example, LVMH has interests in
DFS Group LTD, Miami Cruiseline Services, Le Bon Marché, la Samaritaine, eLuxury, and Sephora.
Trademarks, Patents and Copyrights
The trademarks used in our business include the brand names Estée Lauder, Clinique, Aramis, Prescriptives, Lab Series, Origins,
Tommy Hilfiger, Donna Karan, DKNY, MxAxC, Bobbi Brown, La Mer, Aveda, Jo Malone, Bumble and bumble, Darphin, Michael
Kors, American Beauty, Flirt!, Good Skin™ and Grassroots and the names of many of the products sold under these brands. We own
the material trademark rights used in connection with the manufacturing, marketing and distribution of most of our major products
both in the United States and in the other principal countries where such products are sold. We are the exclusive worldwide licensee
for fragrances, cosmetics and related products for Tommy Hilfiger, Donna Karan, DKNY, Kiton, Michael Kors, Sean John, Missoni,
Daisy Fuentes and Tom Ford. Origins sells products using the name of Dr. Andrew Weil and Aramis and Designer Fragrances sells a
fragrance in the Americas region using the name Mustang, in each case pursuant to a license agreement. We protect our trademarks
for our principal products in the United States and significant markets worldwide. We consider the protection of our trademarks to be
important to our business.
A number of our products incorporate patented, patent-pending or proprietary technology in formulations or packaging. In addition,
several products are covered by design patents, patent applications or copyrights. While we consider these patents and copyrights, and
the protection thereof, to be important, no single patent or copyright is considered material to the conduct of our business.
Employees
At June 30, 2007, we had approximately 28,500 full-time employees worldwide (including sales representatives at points of sale who
are employed by us), of whom approximately 12,900 are employed in the United States and Canada. None of our employees in the
United States is covered by a collective bargaining agreement. In certain other countries, a limited number of employees are covered
by a works council agreement or other syndicate arrangements. We believe that relations with our employees are good. We have
never encountered a material strike or work stoppage in the United States or in any other country where we have a significant number
of employees.
Government Regulation
We and our products are subject to regulation by the Food and Drug Administration and the Federal Trade Commission in the United
States, as well as by various other Federal, state, local and international regulatory authorities and the regulatory authorities in the
countries in which our products are produced or sold. Such regulations principally relate to the ingredients, labeling, packaging and
marketing of our products. We believe that we are in substantial compliance with such regulations, as well as with applicable Federal,
state, local and international and other countries’ rules and regulations governing the discharge of materials hazardous to the
environment. There are no significant capital expenditures for environmental control matters either planned in the current year or
expected in the near future. Along with other unrelated parties, we have been named as a potentially responsible party by the Office of
the Attorney General of the State of New York with regard to a landfill in Long Island, New York. See “Item 3. Legal Proceedings.”
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