P&G Delivers 17% EPS Growth - Raises Fiscal Year Outlook

Sales Up 8%, Blades & Razors and Fabric Care & Home Care Sales Up 11%

CINCINNATI, January 30, 2007 /PRNewswire-FirstCall/ -- The Procter & Gamble Company announced net sales growth of eight percent to $19.73 billion in the October - December quarter. Sales growth was driven by Blades & Razors and Fabric Care & Home Care, both up 11 percent during the quarter. Organic volume and sales grew five percent, with all reportable segments and geographic regions delivering organic volume growth during the quarter. Earnings per share increased 17 percent to $0.84 per share behind sales growth, operating margin improvement and Gillette acquisition benefits.

"This was another solid quarter of broad-based sales and earnings growth during a period of heavy Gillette integration activity," said Chairman of the Board, President and Chief Executive A.G. Lafley. "The results this quarter and a positive outlook for sales and margin improvement give us confidence to raise our top and bottom line guidance for the fiscal year."

    Executive Summary

     * Net sales increased eight percent to $19.73 billion.  Organic sales,

       which exclude the impacts of acquisitions, divestitures and foreign

       exchange, increased five percent with every reportable segment

       delivering growth.

     * Operating profit increased 12 percent during the quarter to $4.35

       billion behind sales growth and operating margin improvement.

       Operating margin expanded 90-basis points behind gross margin

       improvement and lower selling, general and administrative expenses as a

       percentage of net sales.

     * Net earnings increased 12 percent during the quarter to $2.86 billion.

       Diluted net earnings per share increased 17 percent during the quarter

       to $0.84.

     * Gillette integration continued to progress on-track.  To date, billing

       systems, sales forces and distribution networks have been integrated in

       markets representing 95% of net sales.


    Key Financial Highlights

Net sales for the quarter increased eight percent to $19.73 billion. Every reportable segment grew sales led by double-digit increases in Blades & Razors and in Fabric Care & Home Care. Sales increased behind solid market share growth and continued success on product initiatives including Gillette Fusion, Tide Simple Pleasures, Febreze Noticeables, Olay Definity, Pantene Color Expressions, Head & Shoulders restage and Crest Pro Health. Volume increased four percent and organic volume, which excludes the impacts of acquisitions and divestitures, increased five percent during the quarter. Pricing added one percent to sales growth and favorable foreign exchange added an additional three percent. Organic sales, which exclude the impacts of acquisitions, divestitures and foreign exchange, increased five percent.

Net earnings during the quarter increased 12 percent to $2.86 billion. Net earnings were up behind sales growth and operating margin improvements. Operating profit margin increased 90-basis points due to gross margin expansion and lower selling, general and administrative expenses as a percentage of net sales. Diluted net earnings per share increased 17 percent to $0.84.

Gross margin increased 50-basis points to 52.9% of net sales during the quarter. Commodity costs had a negative impact on gross margin of about 80- basis points. Scale leverage from volume growth, price increases and cost savings projects more than offset the commodity cost impact.

Selling, general and administrative expenses (SG&A) were 30.9% of net sales, 30-basis points lower than the prior year period. SG&A improved primarily due to Gillette synergies, which drove overhead expenses down as a percentage of net sales versus the year-ago period.

Operating cash flow was $2.45 billion during the quarter driven by strong earnings, partially offset by an increase in working capital. Accounts receivable increased due to business growth, holiday seasonality and temporary impacts related to the Gillette integration. Free cash flow, defined as operating cash flow less capital expenditures, was $1.78 billion during the quarter. Free cash flow productivity was 62% during the quarter and 75% fiscal year-to-date. The company continues to expect free cash flow productivity to be at or above its 90% target for the fiscal year. Capital expenditures were 3.4% of net sales during the quarter.

Business Segment Discussion

The following provides perspective on the company's October - December quarter results by business segment.

    Beauty and Health

     * Beauty net sales increased eight percent during the quarter to $5.88

       billion driven by solid volume growth across most categories.  Organic

       sales increased five percent, despite a negative impact from sales

       disruptions to the SK-II franchise in Asia.  Volume was up four percent

       and organic volume increased five percent behind mid-single digit

       organic volume growth in Hair Care, Skin Care and Feminine Care and

       high-single digit organic growth in Prestige fragrances.  Volume growth

       was driven by continued successful initiative activity including

       Pantene Color Expressions, Head & Shoulders and Herbal Essences

       restages, Olay Definity and Regenerist, Always Clean, Tampax Pearl

       product upgrades and the Dolce & Gabbana "The One" launch.  Favorable

       product mix drove a positive one percent sales impact while favorable

       foreign exchange trends added an additional three percent to sales

       growth.  Net earnings grew 19 percent to $1.01 billion behind sales

       growth and margin improvement.  Profit margin increased 150-basis

       points behind improved gross margin from a more profitable product mix

       and lower overhead expenses as a percentage of net sales.


     * Health Care net sales increased seven percent to $2.36 billion during

       the quarter.  Volume grew two percent, while organic volume was up

       three percent.  Pricing contributed two percent to segment sales growth

       and favorable product mix added one percent.  Foreign exchange had a

       two percent impact on sales growth.  Pharmaceuticals and Personal

       Health sales increased high-single digits behind mid-single digit

       volume growth.  Prilosec OTC had a strong quarter with market share up

       over two share points versus year ago.  Volume on Prilosec OTC was up

       double-digits behind the market share growth and a low base period

       comparison.  Oral Care sales increased mid-single digits globally

       behind double-digit growth in developing regions.  Health Care net

       earnings grew 22 percent to $472 million.  Profit margin improved 250-

       basis points due to a more profitable product mix, lower product costs

       on Prilosec OTC and Gillette synergies.


    Household Care

     * Fabric Care and Home Care net sales increased 11 percent during the

       quarter to $4.68 billion behind eight percent volume growth.  Volume

       was up double-digits in Home Care and high-single digits in Fabric Care

       behind the continued success of recent initiatives including Tide

       Simple Pleasures, Gain Joyful Expressions, several Swiffer restages,

       Febreze Noticeables, Cascade Action Packs and the Fairy Auto Dish

       expansion in Western Europe.  Previously executed price increases

       contributed one percent to sales growth while favorable foreign

       exchange had a two percent impact.  Net earnings increased nine percent

       to $673 million.  Profit margin was down 20-basis points as scale

       benefits of volume growth, lower overhead expenses as a percentage of

       net sales and manufacturing cost savings projects were offset by higher

       commodity costs.


     * Baby Care and Family Care net sales increased five percent to $3.12

       billion during the quarter.  Volume grew two percent behind mid-single

       digit growth in Baby Care.  Baby care volume increased high-single

       digits in developing regions behind strong market share growth in

       Greater China and in Central and Eastern Europe.  In developed regions,

       Baby Care volume was up low-single digits.  Pampers results were solid

       in North America due to continued growth of Baby Stages of Development

       and the Caterpillar stretch initiative on Pampers Baby Dry.  This

       growth was partially offset by soft results on Pampers in Western

       Europe and Luvs in North America caused by low pricing of both branded

       and private label competitors.  Family Care organic volume was up low-

       single digits on growth in North America, led by strong results on

       Charmin and Bounty Basics.  Pricing in North America Family Care added

       one point to segment sales growth and favorable foreign exchange had a

       two percent impact on sales growth.  Net earnings in Baby Care and

       Family Care increased three percent to $341 million as topline growth

       more than offset higher commodity costs.


     * Snacks, Coffee and Pet Care net sales increased three percent during

       the quarter to $1.25 billion.  Volume was up one percent behind mid-

       single digit growth on Coffee, partially offset by a decline on Pet

       Care.  Coffee volume grew as a result of a base period that included

       impacts from Hurricane Katrina and behind solid results on Folgers

       Simply Smooth and Gourmet Selections.  Snacks volume was in-line with

       the prior year period as strong results on the Pringles Minis and

       Gourmet initiatives were offset by a four percent contraction in the

       North America chips market and heavy competitive merchandising

       activity.  Disproportionate Coffee growth and favorable product mix in

       Snacks drove a positive one percent mix impact while favorable foreign

       exchange added one percent to sales.  Net earnings increased 34 percent

       to $150 million during the quarter.  Earnings increased due primarily

       to the base period earnings impacts related to Hurricane Katrina.


    Gillette GBU

     * Net sales in Blades and Razors increased 11 percent to $1.28 billion.

       Gillette blades and razors market consumption increased seven percent

       behind strong results on Fusion in developed regions and on Mach 3 in

       developing regions.  Volume increased four percent during the quarter

       while favorable product mix and pricing each added two percent to sales

       growth.  Foreign exchange had a positive three percent impact.  Net

       earnings were up 11 percent during the quarter to $301 million behind

       the strong sales growth.


     * Net sales in Duracell and Braun increased five percent to $1.35

       billion.  Volume was flat with organic volume up low-single digits.

       Duracell organic volume increased low-single digits as solid growth in

       developing regions was partially offset by a weaker hurricane season

       and strong competitive activity in North America and Western Europe.

       Braun volume was down slightly due primarily to the divestiture of

       thermometer and blood pressure devices.  The Duracell and Braun

       business was impacted by one-time supply disruptions during systems

       cutover at a warehousing facility in the United States during a key

       holiday shipment period.  The issue was completely resolved during the

       quarter and shipments capabilities returned to full capacity.  A more

       premium product mix contributed two percent to sales growth while

       favorable foreign exchange had a three percent impact.  Net earnings

       increased 32 percent to $218 million.  Earnings growth was driven by

       the increase in net sales and lower acquisition-related expenses versus

       the base period.


    Fiscal Year and January - March Quarter Guidance

The company raised its organic sales growth outlook for the 2007 fiscal year due to solid business momentum and a positive outlook for the remainder of the fiscal year. The company now expects organic sales to grow by five to six percent. This compares to the previous guidance range of four to six percent. The combination of pricing and product mix is expected to have a neutral to positive one percent impact on sales growth. Foreign exchange is expected to have a positive impact of one to two percent. Acquisitions and divestitures are expected to add about four percent to sales growth. Total sales are expected to increase 10 to 12 percent.

The company also raised its earnings per share outlook for the fiscal year due to the strong results in the December quarter. The company now expects earnings per share to be in the range of $2.99 to $3.03, up 13 to 15 percent versus prior year. This includes Gillette dilution, which is now expected to be toward the lower end of the previous $0.12 to $0.18 per share guidance range. Gillette dilution is tracking better than expected due to strong results on Blades & Razors and good progress on cost synergies. Operating margins are expected to improve by over 100-basis points driven primarily by gross margin improvement. The tax rate for fiscal year 2007 is expected to be at or slightly below 30%, in-line with previous guidance. One-time items associated with the Gillette acquisition are expected to be $0.06 to $0.08 per share.

For the January - March quarter, organic sales are expected to grow by five to seven percent. The combination of pricing and product mix is expected to have a neutral to positive one percent impact on sales growth. Foreign exchange is expected to have a positive impact of about two percent. Total sales are expected to increase seven to nine percent. The company expects earnings per share to be in the range of $0.72 to $0.74. Operating margins are expected to be up 50 to 100 basis points driven by both gross margin improvement and SG&A efficiencies.

Forward Looking Statements

All statements, other than statements of historical fact included in this release, are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on financial data, market assumptions and business plans available only as of the time the statements are made, which may become out of date or incomplete. We assume no obligation to update any forward-looking statement as a result of new information, future events or other factors. Forward-looking statements are inherently uncertain, and investors must recognize that events could differ significantly from our expectations. In addition to the risks and uncertainties noted in this release, there are certain factors that could cause actual results to differ materially from those anticipated by some of the statements made. These include: (1) the ability to achieve business plans, including with respect to lower income consumers and growing existing sales and volume profitably despite high levels of competitive activity, especially with respect to the product categories and geographical markets (including developing markets) in which the Company has chosen to focus; (2) the ability to successfully execute, manage and integrate key acquisitions and mergers, including (i) the Company's merger with The Gillette Company, and (ii) the Domination and Profit Transfer Agreement with Wella, and to achieve the cost and growth synergies in accordance with the stated goals of these transactions; (3) the ability to manage and maintain key customer relationships; (4) the ability to maintain key manufacturing and supply sources (including sole supplier and plant manufacturing sources); (5) the ability to successfully manage regulatory, tax and legal matters (including product liability, patent, and intellectual property matters as well as those related to the integration of Gillette and its subsidiaries), and to resolve pending matters within current estimates; (6) the ability to successfully implement, achieve and sustain cost improvement plans in manufacturing and overhead areas, including the Company's outsourcing projects; (7) the ability to successfully manage currency (including currency issues in volatile countries), debt, interest rate and commodity cost exposures; (8) the ability to manage continued global political and/or economic uncertainty and disruptions, especially in the Company's significant geographical markets, as well as any political and/or economic uncertainty and disruptions due to terrorist activities; (9) the ability to successfully manage competitive factors, including prices, promotional incentives and trade terms for products; (10) the ability to obtain patents and respond to technological advances attained by competitors and patents granted to competitors; (11) the ability to successfully manage increases in the prices of raw materials used to make the Company's products; (12) the ability to stay close to consumers in an era of increased media fragmentation; and (13) the ability to stay on the leading edge of innovation. For additional information concerning factors that could cause actual results to materially differ from those projected herein, please refer to our most recent 10-K, 10-Q and 8-K reports.

About Procter & Gamble

Three billion times a day, P&G brands touch the lives of people around the world. The company has one of the strongest portfolios of trusted, quality, leadership brands, including Pampers(R), Tide(R), Ariel(R), Always(R), Whisper(R), Pantene(R), Mach3(R), Bounty(R), Dawn(R), Pringles(R), Folgers(R), Charmin(R), Downy(R), Lenor(R), Iams(R), Crest(R), Oral-B(R), Actonel(R), Duracell(R), Olay(R), Head & Shoulders(R), Wella(R), Gillette(R), and Braun(R). The P&G community consists of over 135,000 employees working in over 80 countries worldwide. Please visit http://www.pg.com for the latest news and in-depth information about P&G and its brands.

The Procter & Gamble Company

Exhibit 1: Non-GAAP Measures

In accordance with the SEC's Regulation G, the following provides definitions of the non-GAAP measures used in the earnings release and the reconciliation to the most closely related GAAP measure.

Organic Sales Growth. Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions, divestitures and foreign exchange from year-over-year comparisons. The company believes this provides investors with a more complete understanding of underlying sales trends by providing sales growth on a consistent basis.

The reconciliation of reported sales growth to organic sales in the Oct - Dec 2006 quarter:

                                           Total P&G     Beauty

    Total Sales Growth                         8%         8%

    Less: Foreign Exchange Impact             -3%        -3%

    Less: Acquisition/Divestiture Impact       0%         0%

    Organic Sales Growth                       5%         5%

Free Cash Flow. Free cash flow is defined as operating cash flow less capital spending. Management views free cash flow as an important measure because it is one factor in determining the amount of cash available for dividends and discretionary investment. Free cash flow is also one of the measures used to evaluate senior management and is a factor in determining their at-risk compensation.

Free Cash Flow Productivity. Free cash flow productivity is defined as the ratio of free cash flow to net earnings. The company's long-term target is to generate free cash at or above 90 percent of net earnings. Free cash flow is also one of the measures used to evaluate senior management and is a factor in determining their at-risk compensation. The reconciliation of free cash flow and free cash flow productivity is provided below ($ millions):

                    Operating   Capital    Free Cash   Net        Free Cash

                    Cash Flow   Spending   Flow        Earnings   Flow

                                                                  Productivity


    Jul - Dec '06   $5,403      $(1,239)    $4,164      $5,560      75%

    Oct - Dec '06   $2,450      $(669)      $1,781      $2,862      62%



                      THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

                              (Amounts in Millions)

                       Consolidated Cash Flows Information


                                                  Six Months Ended December 31

                                                      2006              2005


    BEGINNING CASH                                 $ 6,693           $ 6,389


    OPERATING ACTIVITIES

        NET EARNINGS                                 5,560             4,575

        DEPRECIATION AND AMORTIZATION                1,489             1,158

        SHARE BASED COMPENSATION EXPENSE               289               208

        DEFERRED INCOME TAXES                          201               271

        CHANGES IN:

            ACCOUNTS RECEIVABLE                     (1,668)             (957)

            INVENTORIES                               (486)               73

            ACCOUNTS PAYABLE, ACCRUED AND

             OTHER LIABILITIES                           8              (617)

            OTHER OPERATING ASSETS & LIABILITIES      (110)              (96)

        OTHER                                          120               131


      TOTAL OPERATING ACTIVITIES                     5,403             4,746


    INVESTING ACTIVITIES

        CAPITAL EXPENDITURES                        (1,239)           (1,029)

        PROCEEDS FROM ASSET SALES                      135               339

        ACQUISITIONS, NET OF CASH ACQUIRED            (139)              249

        CHANGE IN INVESTMENT SECURITIES                620                39


      TOTAL INVESTMENT ACTIVITIES                     (623)             (402)


    FINANCING ACTIVITIES

        DIVIDENDS TO SHAREHOLDERS                   (2,045)           (1,691)

        CHANGE IN SHORT-TERM DEBT                    9,873            (5,468)

        ADDITIONS TO LONG TERM DEBT                      7            15,412

        REDUCTION OF LONG TERM DEBT                (12,488)           (2,602)

        IMPACT OF STOCK OPTIONS AND OTHER              730               510

        TREASURY PURCHASES                          (2,713)           (9,032)


      TOTAL FINANCING ACTIVITIES                    (6,636)           (2,871)


    EXCHANGE EFFECT ON CASH                            150               (46)


    CHANGE IN CASH AND CASH EQUIVALENTS             (1,706)            1,427


    ENDING CASH                                    $ 4,987           $ 7,816




                THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

                            (Amounts in Millions)

                    Consolidated Balance Sheet Information



                                         December 31, 2006     June 30, 2006


    CASH AND CASH EQUIVALENTS                       $4,987            $6,693

    INVESTMENTS SECURITIES                             521             1,133

    ACCOUNTS RECEIVABLE                              7,523             5,725

    TOTAL INVENTORIES                                6,883             6,291

    OTHER                                            4,775             4,487

    TOTAL CURRENT ASSETS                            24,689            24,329


    NET PROPERTY, PLANT AND EQUIPMENT               19,096            18,770

    NET GOODWILL AND OTHER INTANGIBLE ASSETS        89,805            89,027

    OTHER NON-CURRENT ASSETS                         3,710             3,569


    TOTAL ASSETS                                  $137,300          $135,695



    ACCOUNTS PAYABLE                                $4,490            $4,910

    ACCRUED AND OTHER LIABILITIES                   10,628             9,587

    TAXES PAYABLE                                    3,643             3,360

    DEBT DUE WITHIN ONE YEAR                        12,533             2,128

    TOTAL CURRENT LIABILITIES                       31,294            19,985


    LONG-TERM DEBT                                  23,650            35,976

    OTHER                                           16,992            16,826

    TOTAL LIABILITIES                               71,936            72,787


    TOTAL SHAREHOLDERS' EQUITY                      65,364            62,908


    TOTAL LIABILITIES & SHAREHOLDERS' EQUITY      $137,300          $135,695




                THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

                            (Amounts in Millions)

                      Consolidated Earnings Information


                                  Three Months Ended December 31, 2006


                                  % Change Earnings % Change          % Change

                                    Versus   Before   Versus            Versus

                                      Year   Income     Year      Net     Year

                        Net Sales      Ago    Taxes      Ago Earnings      Ago


      BEAUTY              $ 5,884       8%   $1,335      14%   $1,008      19%

      HEALTH CARE           2,355       7%      683      20%      472      22%

    BEAUTY AND HEALTH       8,239       8%    2,018      16%    1,480      20%


      FABRIC CARE AND

       HOME CARE            4,682      11%    1,004       9%      673       9%

      BABY CARE AND

       FAMILY CARE          3,119       5%      548       6%      341       3%

      SNACKS, COFFEE

       AND PET CARE         1,253       3%      232      31%      150      34%

    HOUSEHOLD CARE          9,054       8%    1,784      10%    1,164      10%


      BLADES AND RAZORS     1,282      11%      417      11%      301      11%

      DURACELL AND BRAUN    1,347       5%      312      28%      218      32%

    GILLETTE GBU            2,629       8%      729      18%      519      19%


    TOTAL BUSINESS

     SEGMENT               19,922       8%    4,531      14%    3,163      16%

    CORPORATE                (197)     N/A     (441)    N/A      (301)     N/A

    TOTAL COMPANY         $19,725       8%   $4,090      12%   $2,862      12%




                                   Six Months Ended December 31, 2006


                                  % Change Earnings % Change          % Change

                                    Versus   Before   Versus            Versus

                                      Year   Income     Year      Net     Year

                        Net Sales      Ago    Taxes      Ago Earnings      Ago


      BEAUTY              $11,487      10%   $2,532      13%   $1,880      15%

      HEALTH CARE           4,582      18%    1,243      21%      857      23%

    BEAUTY AND HEALTH      16,069      12%    3,775      15%    2,737      17%


      FABRIC CARE AND

       HOME CARE            9,434      10%    2,111      10%    1,427      12%

      BABY CARE AND

       FAMILY CARE          6,218       5%    1,148      12%      724      11%

      SNACKS, COFFEE

       AND PET CARE         2,316       6%      376      27%      237      26%

    HOUSEHOLD CARE         17,968       8%    3,635      12%    2,388      13%


      BLADES AND RAZORS     2,581     124%      867     131%      638     135%

      DURACELL AND BRAUN    2,323      82%      463      91%      313      90%

    GILLETTE GBU            4,904     102%    1,330     115%      951     118%


    TOTAL BUSINESS

     SEGMENT               38,941      16%    8,740      23%    6,076      24%

    CORPORATE                (431)     N/A     (774)     N/A     (516)     N/A

    TOTAL COMPANY         $38,510      16%   $7,966      21%   $5,560      22%




                   OCTOBER - DECEMBER NET SALES INFORMATION

                       (Percent Change vs. Year Ago) *


                          Volume   Volume

                          With     Without                              Net

                          Acqui-   Acqui-                               sales

                          sitions/ sitions/                      Net    Growth

                          Dives-   Dives-   Foreign        Mix/  Sales  Excl.

                          titures  titures  Exchange Price Other Growth F/X


    BEAUTY AND HEALTH

      BEAUTY                 4%       5%       3%      0%    1%    8%     5%

      HEALTH CARE            2%       3%       2%      2%    1%    7%     5%


    HOUSEHOLD CARE

      FABRIC CARE

       AND HOME CARE         8%       7%       2%      1%    0%   11%     9%

      BABY CARE

       AND FAMILY CARE       2%       3%       2%      1%    0%    5%     3%

      SNACKS, COFFEE

       AND PET CARE          1%       1%       1%      0%    1%    3%     2%


    GILLETTE GBU

      BLADES AND RAZORS      4%       4%       3%      2%    2%   11%     8%

      DURACELL AND BRAUN     0%       1%       3%      0%    2%    5%     2%


    TOTAL COMPANY            4%       5%       3%      1%    0%    8%     5%


    * These sales percentage changes are approximations based on quantitative

      formulas that are consistently applied.




                THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

                (Amounts in Millions Except Per Share Amounts)

                      Consolidated Earnings Information


                                 OND QUARTER                  FYTD


                           OND 06   OND 05  % CHG  12/31/2006 12/31/2005 % CHG

    NET SALES             $19,725  $18,337    8 %     $38,510    $33,130  16 %

      COST OF PRODUCTS

       SOLD                 9,287    8,732    6 %      18,152     15,891  14 %

    GROSS MARGIN           10,438    9,605    9 %      20,358     17,239  18 %

      SELLING, GENERAL &

       ADMINISTRATIVE

       EXPENSE              6,088    5,713    7 %      11,954     10,290  16 %

    OPERATING INCOME        4,350    3,892   12 %       8,404      6,949  21 %

      TOTAL INTEREST

       EXPENSE                339      299                697        518

      OTHER NON-OPERATING

       INCOME, NET             79       68                259        142

    EARNINGS BEFORE

     INCOME TAXES           4,090    3,661   12 %       7,966      6,573  21 %

      INCOME TAXES          1,228    1,115              2,406      1,998


    NET EARNINGS          $ 2,862  $ 2,546   12 %     $ 5,560    $ 4,575  22 %


    EFFECTIVE TAX RATE     30.0 %   30.5 %             30.2 %     30.4 %



    PER COMMON SHARE:

      BASIC NET EARNINGS    $0.89    $0.76   17 %       $1.73      $1.57  10 %

      DILUTED NET EARNINGS  $0.84    $0.72   17 %       $1.63      $1.48  10 %

      DIVIDENDS             $0.31    $0.28   11 %       $0.62      $0.56  11 %

    AVERAGE DILUTED

     SHARES

     OUTSTANDING          3,406.5  3,547.0            3,410.1    3,098.0




    COMPARISONS AS A %                      Basis                       Basis

     OF NET SALES                           Pt Chg                      Pt Chg

      COST OF PRODUCTS

       SOLD                47.1 %   47.6 %    (50)     47.1 %     48.0 %  (90)

      GROSS MARGIN         52.9 %   52.4 %     50      52.9 %     52.0 %   90

      SELLING, GENERAL &

       ADMINISTRATIVE

       EXPENSE             30.9 %   31.2 %    (30)     31.0 %     31.1 %  (10)

      OPERATING MARGIN     22.1 %   21.2 %     90      21.8 %     21.0 %   80

      EARNINGS BEFORE

       INCOME TAXES        20.7 %   20.0 %     70      20.7 %     19.8 %   90

      NET EARNINGS         14.5 %   13.9 %     60      14.4 %     13.8 %   60

CONTACT: Media, Doug Shelton, +1-513-983-9736, or cell, +1-513-293-4117,or ; or Investors, Chris Peterson, +1-513-983-2414, bothof The Procter & Gamble Company Shelton.do@pg.com

Web site: http://www.pg.com/

Ticker Symbol: (NYSE:PG)

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Posted: January 2007


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