History

William Procter and James Gamble were married to two sisters Olivia and Elizabeth Norris whose father convinced his two sons-in-law to become business partners. In 1837 the partnership formed a humble but bold new enterprise, Procter & Gamble. What began as a small, family-operated soap and candle company grew and thrived, inspired by P&G's purpose of providing products and services of superior quality and value. In 1882 Ivory soap represents P&Gs first effort at mass-marketing its products through continuous consumer advertising. This innovative brand-building effort begins with a print advertisement that focuses on Ivorys purity, forging a relationship between consumers and the product. This leads a transformation in the way companies market their products an area where P&G continues to lead and innovate today. In 1901 King C Gillette patents the KC Gillette Razor, an alternative to the straight razor that offers men a safe, convenient and inexpensive way to shave. This shaving breakthrough features a permanent handle and disposable double-edge razor blade. Gillette joined P&G in 2005. In 1915 the founders son, James N. Gamble, helps create the first coordinated community campaign for charities. That charitable organization, known today as The United Way, is the leading community-based fund-raiser in the United States. In 1924 P&G becomes the first company to conduct deliberate, data-based market research with consumers. This forward-thinking approach enables us to improve consumer understanding, anticipate consumer needs and respond with products that improve their everyday life. In 1946 Tide, the washday miracle, is introduced. With a new formula that cleans better than anything then on the market, Tide makes laundry easier and less time-consuming. Its popularity with consumers makes Tide the countrys leading laundry product by 1949. In 1955 Crest is co- developed with Indiana University. This collaboration delivers a product that is a breakthrough in the use of fluoride to protect against tooth decay, the second most prevalent disease at the time. In 1961 P&G answers the age old need to reduce leaks, mess and rashes caused by wetness of cloth baby diapers by introducing Pampers, the first affordable, successful disposable diaper. Today, more babies around the globe experience the comfort and dryness of Pampers than any other diaper brand. In 1985 P&G acquires Richardson-Vicks, maker of personal health care products including the Pantene, Olay and Vicks respiratory care product lines. This significantly expands our ability to improve the everyday lives of more consumers in more geography around the world.

Global Operations
The P&G community consists of over 138,000 employees working in over 80 countries worldwide. P & G provides products and services of superior quality and value to consumers in over 180 countries.

Annual Report/Letter to Shareholders

Global economic growth stopped GDP declined from +4% during the first quarter of calendar 2008 to -6% in the fourth quarter, a ten-point swing.

Economies also slowed in developing markets in China, Central and Eastern Europe and the Middle East. These markets, which had been growing GDP about +6%, slowed to an average -1% during the fourth quarter of 2008 a seven-point swing. P & G made two critical choices to deal with this macroeconomic environment: (1) To focus on disciplined cash and cost management and (2) To invest in capacity, innovation and consumer value this year to ensure P&G is leading and growing market share when we come out of the recession. P & G made strategic investments to generate growth in future years. P & G are investing 4% of sales in capital spending. Which include funding for new manufacturing capacity to support future growth. P & G will add 20 new manufacturing facilities over the next five years. Almost all of these facilities are in developing markets, and almost all will be multi-product-category facilities. Nearly 80% of P&Gs sales and profit growth this decade has come from 10 businesses, inclu ding Baby Care, Blades and Razors, Fabric Care, Family Care, Feminine Care, Home Care, Oral Care, Prestige Fragrances, Retail Hair Care and Skin Care. About 75% of sales and profit growth has come from P&Gs leading billion -dollar brands Beauty, Personal Care and Health Care have accounted for more than 60% of sales and profit growth in the past eight years. P & Gs third strategic choice was to extend the availability and affordability of P&G brands to more low -income consumers, particularly in developing markets. Developing markets represent 32% of sales, up from about 20% at the beginning of the decade, and have contributed 42% of sales growth and 29% of profit growth. P&G has a 19% share in developing markets and is growing steadily by about half a share point a year. We now have a developing-market business which, at about $25 billion in annual sales, is over five times the average developing-market sales of our major competitors.