Wells Fargo ICL March 2011

January 20, 2011
Equity Research
Procter & Gamble Co.
PG: Initiated Coverage With Outperform Rating, $70-73 Valuation Outperform
D&E Opportunities Should Drive Top-Line, Op Mgn, And EPS Growth
• Summary: We have initiated coverage of PG with an Outperform rating on the Sector: Household and Personal Care
shares and a $70-73 valuation range. Our rating within our Market Weight Products
Household and Personal Care sector rating is based on (1) P&G's industry- Market Weight
leading research and development (R&D) investments, (2) penetration
acceleration in developing and emerging (D&E) markets (i.e., more relative
runway versus competitors), and (3) leveraging of both scale and financial Initiation of Coverage
strength to increase earnings. Near-term gross margin will likely be restrained
by rising input costs. Long-term gross or operating margin expansion will likely 2010A 2011E 2012E
be driven by ongoing cost-saving initiatives, improving business and product EPS Curr. Prior Curr. Prior
mix, and leveraging of distribution expansion. P&G's portfolio provides a Q1 (Sep.) $0.97 $1.02 A NC $1.13 NE
competitive advantage with (1) broad exposure to fast-growing categories, Q2 (Dec.) 1.10 1.10 NE 1.20 NE
Q3 (Mar.) 0.89 1.00 NE 1.11 NE
(2) strong margin from scale in market-leading brands, and (3) efficiency
Q4 (June) 0.71 0.86 NE 0.95 NE
entering D&E markets. P&G will likely continue to make small to midsize
FY $3.67 $3.98 NE $4.39 NE
accretive acquisitions. Current valuations on our 2012 estimates are 31% and CY $3.72 $4.19 $4.61
27% below and above the low end of historical P/E and enterprise value (EV)-to- FY P/E 17.8x 16.4x 14.9x
EBITDA ranges. Our range reflects the collective lower third of historical Rev. (MM) $78,938 $81,873 $85,446
forward P/E and EV-to-EBITDA ranges. We believe strong free cash flow, a Source: Company Data, Wells Fargo Securities, LLC estimates, and Reuters
NA = Not Available, NC = No Change, NE = No Estimate, NM = Not Meaningful
strong balance sheet, prudent capital deployment, and a 2.9% dividend yield V = Volatile, = Company is on the Priority Stock List
should provide downside risk support to the stock. We believe PG will
outperform the sector and the S&P 500 on a total return basis.
• FY2011E And FY2012E Key Assumptions. Our FY2011 and FY2012 EPS Ticker PG
estimates of $3.98 and $4.39 are based upon 4.0% and 4.4% organic revenue Price (01/20/2011) $65.35
growth, and modest operating margin improvement. 52-Week Range: $39-66
• Upcoming Catalysts. These include (1) January 27, 2011, FQ2 2011 earnings, Shares Outstanding: (MM) 3,025.6
and (2) CY2011 new product announcements. Relative returns versus the S&P Market Cap.: (MM) $199,084.0
500 are best during the August through October period, with the best returns S&P 500: 1,280.26
occurring in September. The stock tends to underperform the market early in the Avg. Daily Vol.: 10,803,200
calendar year, with the worst returns usually occurring in April. Dividend/Yield: $1.93/2.9%
LT Debt: (MM) $32,976.0
LT Debt/Total Cap.: 34.3%
Valuation Range: $70.00 to $73.00 ROE: 18.0%
Our valuation range represents 15.2-15.8x P/E, 10.9-11.3x EV-to-EBITDA, and 3-5 Yr. Est. Growth Rate: 10.0%
6.6%-6.4% free cash flow yield to our CY2012 EPS, EBITDA and free cash flow per CY 2011 Est. P/E-to-Growth: 1.6x
share estimates of $4.61, $7.72, and $4.64, respectively. Risks to our range include Last Reporting Date: 10/27/2010
(1) prolonged global economic downturn, (2) foreign exchange fluctuations, (3) an Before Open
increase in taxes on international profits, (4) aggressive competitive discounting, Source: Company Data, Wells Fargo Securities, LLC estimates, and Reuters
(5) loss of a major customer (Wal-Mart, Target), (6) significant input cost inflation,
(7) integration risk and dilution related to future acquisitions, and (8) European
antitrust issues.
Timothy Conder, CPA, Senior Analyst
Investment Thesis: (314) 955-5743
A diversified portfolio, deep management team, industry-leading R&D investments, tim.conder@wachovia.com
developing and emerging markets prospects, and opportunities to leverage scale Joe Lachky, Associate Analyst
(314) 955-2061
and financial strength provide P&G with a competitive advantage over competitors. joe.lachky@wachovia.com
Valuations should expand to the collective lower third of historical ranges given Michael K. Walsh, CFA, CPA, Associate Analyst
accelerating top-line and EPS growth rates and near-term risks from commodity (314) 955-6277
prices and foreign exchange. michael.walsh@wachovia.com
Please see page 38 for rating definitions, important disclosures

and required analyst certifications
Wells Fargo Securities, LLC does and seeks to do business with companies
covered in its research reports. As a result, investors should be aware that the
firm may have a conflict of interest that could affect the objectivity of the
report and investors should consider this report as only a single factor in
making their investment decision.
PG010611-084724
WELLS FARGO SECURITIES, LLC
Household and Personal Care Products EQUITY RESEARCH DEPARTMENT
Company Description
Procter & Gamble Co., based in Cincinnati, Ohio, is the largest global manufacturer and marketer of consumer
packaged goods. The company produces a very diverse set of products in the Beauty, Grooming, Health Care,
Snacks and Pet Care, Fabric Care and Home Care, and Baby Care and Family Care segments. The brand
portfolio is extremely deep with 50 "leadership brands," including 23 billion-dollar brands. Key brand names
include Crest toothpaste, Duracell batteries, Gillette razors, Olay skin care, Pampers diapers, Pantene hair
care, and Tide laundry detergent. Products are sold in over 180 countries primarily through mass
merchandisers, grocery stores, club stores, drug stores, and high-frequency stores (neighborhood stores in
developing markets). See www.pg.com.
Investment Thesis And Valuation

We have initiated coverage of Procter & Gamble with an Outperform rating on the shares and a
$70-73 valuation range. Procter & Gamble is the largest global manufacturer and marketer of consumer
packaged goods with a diversified portfolio of well-known brands (Crest, Duracell, Gillette, Olay, Pampers,
Pantene, and Tide) and a deep management team. P&G’s sales are primarily concentrated in the fabric care
and home care segment (29.6% of net sales) and the beauty segment (24.3% of net sales), but the company also
has exposure in baby care, family care, health care, grooming, snacks, and pet care categories. Among the
major industry players, P&G has a large and growing footprint in the high-growth developing and emerging
markets (33% of net sales). We believe organic sales growth will return to mid-single digits and EPS should
accelerate to low-double-digit rates over the next few years, driven by a multi-tiered growth strategy and cost-
saving initiatives, coupled with ongoing share repurchases. We believe P&G’s organic sales and earnings
growth should accelerate driven by (1) new products from industry-leading R&D investments, (2) penetration
accelerating in developing and emerging markets (i.e., more relative runway versus the company’s largest
competitors), and (3) leveraging both scale and financial strength (i.e., margin, balance sheet, cash flow) to
increase earnings. Near-term gross and operating margin expansion will likely be driven by ongoing cost-
saving initiatives, at least partially offset by input cost and foreign exchange headwinds. Long-term margin
growth will likely be driven by simplification of businesses and processes, improving business and product
mix, and leveraging of distribution expansion. We believe P&G’s diversified product portfolio provides a
competitive advantage given (1) high relative exposure to fast-growing product categories, (2) strong margin
from scale in market-leading brands, and (3) efficiency entering developing and emerging markets with fast
purchase cycle products (i.e., detergents, baby care, and feminine care) to quickly build scale. We believe the
stock will outperform the sector and the S&P 500 on a total return basis.
Valuations are currently 31% and 27% below and above the low end of historical forward P/E and EV-to-
EBITDA ranges, respectively, on our 2012 estimates. Strong free cash flow, a high-grade balance sheet,
prudent excess capital deployment (likely further dividend increases, share repurchases, and small to midsize
accretive acquisitions), and the current 2.9% dividend yield all should provide downside risk support to the
stock. Upcoming data points include (1) updated FY2011 guidance concurrent with FQ2 2011 earnings, and (2)
CY2011 new product announcements.
Our valuation range represents 15.2-15.8x P/E, 10.9-11.3x EV-to-EBITDA, and 6.4-6.6% free
cash flow yield to our CY2012 EPS, EBITDA and free cash flow/share estimates of $4.61, $7.72,
and $4.64, respectively. Since 1991 (excluding the aberrational years of 1997-2000), P&G’s historical
forward valuation ranges are 15.6-20.0x P/E, 9.6-12.0x EV-to-EBITDA, and a 4.8-6.4% free cash flow yield.
We believe multiples should expand to the approximate the collective lower third of historical ranges given (1)
lower-than-historical, but accelerating, top-line and EPS growth rates, and (2) near-term risks to estimates
from input costs and foreign exchange.
Investment Risks
A prolonged U.S. or worldwide economic downturn from current levels
Foreign exchange swings given that 62% of revenue is international
An increase in taxes on international profit
Aggressive competitive conditions necessitating discounting and promotions
Loss of a major customer (Wal-Mart, Target)
Significant input cost inflation
Integration risks and potential dilution related to future acquisitions
Industrywide European antitrust issues
2
Procter & Gamble Co. EQUITY RESEARCH DEPARTMENT
Summary Overview
Procter & Gamble is the largest global manufacturer and marketer of consumer packaged goods. Through
successful R&D and marketing, the company has created an unmatched brand portfolio, with market-leading
brands spanning multiple product categories and price tiers. The portfolio includes 50 “leadership brands,”
constituting 90% of the company’s revenue and operating profit. These consist of 23 billion-dollar brands,
which include Crest, Duracell, Gillette, Olay, Pampers, Pantene, and Tide.
Procter & Gamble has structured its organization into three global business units (GBU): beauty and grooming
(33.8% of FY2010 and an estimated 34.1% of FY2011 net sales), health and well-being (18.2% of FY2010 and
an estimated 18.1% of FY2011 net sales), and household care (48.0% of FY2010 and an estimated 47.8% of
FY2011 net sales), which are supported by the company’s global operations, global business services, and
corporate functions operations. The company has six reportable segments within the GBU structure:
Beauty and grooming GBU: beauty, grooming
Health and well-being GBU: health care, snacks and health care
Household care GBU: fabric care and home care, baby care, and family care
Procter & Gamble’s largest product categories are laundry (approximately 17% of net sales), located in the
fabric care and home care segment, and diapers (approximately 11% of net sales), found in the baby care and
family care segment.
Procter & Gamble is also well regarded for its deep and experienced management team. Senior management is
relatively new to its positions, with the CEO and CFO both assuming their current positions in 2009 and all
vice chairmen-level executives elected to officer positions in the 2007-08 period, although all have significant
experience with the company. P&G is best known for its strong track record of results, driven by (1) new
products and (2) successful integration of multiple acquisitions.
Current major investor concerns affecting both the company and the industry include the following:
Consumer destocking,
Consumer trade-down (i.e., negative mix),
Increased trade spending,
Input costs,
Foreign exchange, and
Pricing
Please see our industry report dated January 20, 2011, for a detailed discussion of these issues and a broad
industry overview.
In our opinion, not all of these issues are material fundamental concerns. We believe the bottom-line impact of
the collective remaining items can be more than offset by positive growth prospects from (1) new products
from industry-leading R&D investments, (2) penetration accelerating in D&E markets (i.e., more relative
runway versus the company’s largest competitors), and (3) leveraging both scale and financial strength (i.e.,
margin, balance sheet, cash flow) to increase earnings. Finally, in addition to CY2011 new product
introductions providing upcoming potential catalysts, P&G will likely continue to make small to midsize
accretive acquisitions, based on its company strategy.
Investor Concerns And Outlook
Several issues include (1) consumer destocking, (2) consumer trade-down (i.e., negative mix), (3) increased
trade spending, (4) input costs, (5) foreign exchange, and (6) pricing have posed headwinds for companies in
the Household Products and Personal Care industry over the past 12-18 months and remain of concern.
Consumer Destocking
We believe destocking for consumer staples will be at worst a non-issue by early CY2011 (if not
already completed). Therefore, this should no longer be a factor for the volume component of sales
assuming all other factors (i.e., trade spending, new products, etc.) remain equal.
3
Consumer Trade-Down
While consumers remain very price conscious, we believe the trade-down dynamic has largely run its course
(i.e., those that will trade-down already have), absent another leg down in the global economy. With the
outlook for developed economies to remain in a period of below-trend cyclical growth and relatively high
unemployment, the primary question that remains, in our view, is, how long will the new period of “value
consciousness” in consumer staples last before a new material trade-up cycle begins and to what degree, if any,
has a structural shift occurred?
We believe the timing of a new trade-up cycle emerging will be elongated as consumers continue to look
for savings in consumer staples.
We also believe there has been some, but yet unquantifiable, structural shift toward value.
However, we do not believe there has been a permanent fundamental change in consumer behavior, as
evidenced by successful recent new premium products introduced by the company and competitors (i.e.,
consumers still pay a premium for clear value provided).
The success of recent new premium products like the Fusion ProGlide razor lends credence to this conclusion.
However, management has also seen strong growth in value products in developed markets, including growth
in basics offerings (i.e., Bounty Basic and Charmin Basic), and the retail hair and skin business growing faster
than Salon Professional and Prestige. While historically focusing primarily on developing premium products,
management has also shifted its innovation focus in part to developing new products in mid-tier or value tiers
to benefit from the trade-down dynamic. As mid-tier value products become a larger part of Procter &
Gamble’s product portfolio, it will likely have an ongoing negative sales mix impact (due to a lower price per
unit). Over the long term, P&G’s growing emerging market presence provides an opportunity as consumers
trade upward and expand per-capita consumption. This could provide continued growth even in the absence of
market-share gains.
Trade Spending
To drive limited revenue growth in a soft economy, competitors (especially those producing premium
products) focused on maintaining market share and preventing consumers from trading downward. This was
largely approached through increased trade spending (i.e., temporary price reductions as manufacturers
attempt to adjust to competitive pricing actions without officially reducing list prices), which reduced
manufacturers’ gross-to-net sales.
Procter & Gamble is the market leader in most categories in which it competes and, as such,
generally leads the market with pricing actions. In addition, the company’s brands in developed
markets are weighted toward premium products and the company has a high exposure to categories most
affected by trade spending. Recent pricing pressure has been greatest in diapers and laundry (P&G’s two
largest categories), categories in which competitors did not follow pricing movements (i.e., batteries), and in
geographies where foreign exchange increased, then reversed.
Trade spending is not a significant part of management’s overall strategy, although management has recently
utilized promotional spending to generate trial on new products, i.e., the “Have You Tried This Yet?”
campaign. Management has said that it would like to see low levels of promotional spending, preferring that
consumers see the very best price every day. Over time, we expect P&G and other manufacturers to ease
promotions and build brand awareness through more traditional means.
Given (1) the limited incremental benefit of further trade spending on volume, and (2) considering rising input
costs (see subsequent discussion), we believe manufacturer trade spending will continue to abate sequentially,
as it appears as if the most aggressive trade spending-related pricing actions (CQ2 2010) are now behind the
industry. The larger question, in our view, is if the consumer has become conditioned to promotional pricing
and will continue to buy when price increases return or promotions abate.
Input Costs
Procter & Gamble spends approximately $24 billion annually (a FY2009 statistic) on materials,
its largest cost bucket. The company has broad exposure across many commodities, including natural gas,
oil derivatives, agriculture-based materials, specialty chemicals, metals, and packaging materials (see appendix
for charts of some key commodities). Given the wide range of products Procter & Gamble produces, its overall
commodity exposure is better diversified than its competitors’.
4
Commodity price changes generally flow through the income statement on an average 3+
month lag, depending on the product. For example, changes in pulp prices flow through at a faster rate
(approximately three months) than resins (approximately nine months). The company also actively buys raw
materials to sell to suppliers because of the scale it is able to achieve. Given Procter & Gamble’s size and wide
range of uses for raw materials across multiple product lines, management is able to demand a better price
than individual third-party vendors might be able to negotiate. Management’s priority is to enter into long-
term contracts focusing on supply availability versus price. Procter & Gamble does not hedge commodity
exposure as its broad commodity requirements, coupled with the company viewing commodities, foreign
exchange, labor, and logistics net exposure, collectively tends to provide an operational hedge.
Foreign Exchange
Foreign exchange is an important factor in net sales and earnings growth. Although the company does not
specifically break out its foreign exchange exposure, we believe the company’s largest currency exposures
correspond closely with its net geographic sales exposure: the euro, the Canadian dollar, the Japanese yen, the
Pound Sterling, and the Mexican peso. The Chinese Yuan and the Russian ruble are also important currencies.
Management expects foreign exchange to be a 1-2% headwind to net sales in FY2011 and a 2% headwind in
FQ2 2011. The company does not hedge its foreign currency exposure.
Exhibit 1.
PG Revenue by Currency
FY 2010
Other
U.S.
30.0%
Dollar
Mex. Peso 38.0%
3.0%
Pound
3.5% Yen
4.0% C an. Euro
Dollar 17.5%
4.0%
So urce: Co mpany repo rts and Wells Fargo Securities, LLC estimates
Procter & Gamble manages its businesses independent of foreign exchange considerations, focusing instead on
organic growth. The functional currencies of foreign subsidiaries are the local currency. From a cost
standpoint, management examines the benefits of local sourcing of materials and labor, versus an out-of-
country sourcing and distribution model, using local sourcing to hedge foreign exchange exposure from the
revenue side. Management tends to view its foreign currency exposure on a companywide basis, generally
describing and managing foreign exchange fluctuations in a global context within a collective bucket that
includes other input (e.g., commodities, labor, and logistical) costs.
Even though major developing economies in China and India have some measure of foreign exchange controls,
Venezuela has been a particular country to closely monitor, due to the extreme measures taken by the
government to tightly control all aspects of the economy.
Beginning January 1, 2010, Venezuela was designated a highly inflationary economy under U.S. GAAP. This
requires companies with Venezuelan subsidiaries to use the U.S. dollar as their functional currency. Quarterly
(1) changes in non-dollar monetary assets and liabilities of these subsidiaries, and (2) transactional foreign
exchange gains and losses are required to be reflected in the income statement.
January 8, 2010, Venezuela devalued the Bolivar versus the U.S. dollar, instituting a tiered official exchange
rate of 2.6 (versus the prior, 2.15) for essential imported goods (i.e., food, medicine, and capital investments),
and 4.3 for non-essential imported goods, including Venezuelan subsidiary dividend repatriations. It should be
noted that many imported household and personal care products qualify as essential imported goods. The
government limits the amount of foreign exchange available at the official rates. Outside of the official
exchange rate, Bolivars were able to be exchanged at a parallel rate (a rate less favorable than the official
government rate) via securities transactions executed by brokerages.
5
In May 2010, the Venezuelan government further tightened exchange controls by (1) making the Central Bank
of Venezuela the only legal intermediary through which parallel securities transactions could be executed, and
(2) effectively put the government in control of the parallel exchange rate by limiting the notional transactions
available at the parallel rate. During CQ2 2010, the parallel rate approximated 8.2 Bolivars to the U.S. dollar
(Source: Bloomberg) prior to the May exchange control measures and approximated 5.3 Bolivars per U.S.
dollar on June 30, 2010.
On January 1, 2011, Venezuela devalued the Bolivar for essential imported goods to 4.3 from 2.6, effectively
setting the official exchange rate for all imported goods (essential and non-essential) at 4.3 Bolivars per U.S.
dollar. In late December 2010, the parallel rate approximated 5.3 Bolivars per U.S. dollar (Source: Bloomberg).
Procter & Gamble has been able to offset the revenue impact from the currency devaluation as approximately
50% of goods sold in Venezuela are locally produced (however, the company does import raw materials and
packing materials, most of which are contracted in U.S. dollars). We note that local production does introduce
the risk of nationalization (we believe the risk is low at this point) and the risk of supply interruptions (e.g.,
water, electricity, and labor). Management remains proactive in repatriating Bolivars when available, while
maintaining enough currency to run its business. The political and business climate remains shaky and it is
uncertain how long it will take to return sales and profit to prior levels. Management believes the true
exchange rate economics for the subsidiary are at a blended rate between the official and parallel rates.
Following the January 2010 devaluation, Procter & Gamble began using the 4.3 rate to reflect financial results
in Venezuela (both income from subsidiary and translation of the balance sheet), with the exception of
$260 million of its $490 million monetary balance re-measured at the higher parallel rate at September 30,
2010. Changing the exchange rate to 4.3 from 2.15 had the effect of lowering net sales by approximately 1% and
EPS by approximately $0.08 in FY2010. We expect foreign exchange from Venezuela to negatively affect net
sales in FH1 2011, at least until the 2010 currency devaluation annualizes. Management expects an $0.08
negative impact to EPS in FY2011 from Venezuela (similar to FY2010).
We do not expect the January 1, 2011, devaluation to be a headwind to net sales. However, there will
likely be continued profitability pressures for Procter & Gamble to the extent the subsidiary imported goods at the
prior 2.6 rate and dependant on the ability of the subsidiary to raise local prices to maintain margin.
When examining the accounting of companies with net monetary assets located in Venezuela, we believe
investors should assume (1) all planned settlements of U.S. dollar-denominated liabilities by Venezuelan
subsidiaries are done at the parallel rate and (2) that remaining net monetary assets of Venezuelan subsidiaries
are valued at the official rate (assuming these net monetary assets will be repatriated). Clearly investors must
monitor (1) availability of foreign exchange at the official rate and (2) the spread between the official and
parallel rates. As the government effectively controls both the official and parallel rates, we believe the more
conservative approach would be to value all net monetary assets of Venezuelan subsidiaries at the parallel rate.
Pricing
While we believe consumer trade-down and trade-related spending has stabilized, when coupled with a likely
sub-par and elongated economic recovery, the ability for the HPC industry to take pricing as an offset to input
cost pressures is likely to be very gradual. We believe the key to near- and long-term pricing power remains
actual or perceived innovation, as price increases are most easily accepted by consumers (and retailers) when
matched with new product introductions.
While trade spending fluctuations are generally temporary, list pricing changes are more permanent in nature.
Procter & Gamble was most aggressive with list price adjustments in the quarter ended December 2009,
lowering prices for the Duracell, Cheer, and Tide (large sizes) brands, and making adjustments for products in
the Central & Eastern Europe, Middle East & Africa (CEEMEA) region. In FY2011, pricing should turn positive
as these changes are annualized. Management prefers to match price increases in conjunction with
introduction of new premium innovation and occasionally prices to offset foreign currency pressures.
Management expects pricing to be neutral to slightly positive for FY2011, with pricing likely to be
negative in FH1 and turn positive in FH2 as the company annualizes many of the strategic adjustments made
in fall 2009. In Procter & Gamble’s segment reporting, the “price” impact to sales includes both list price
changes and trade spending (promotions).
6
Key Growth Drivers

As industry volume and trade spending normalize, organic sales growth for Procter & Gamble outside of
category performance will likely be driven by (1) new products, (2) geographic white-space expansion, (3)
incremental international distribution penetration, (4) developing and emerging market development, and (5)
entering and creating new categories. These top-line drivers should allow for further mix and volume margin
leverage. Finally, while we do not factor this into our estimates, it is possible that Procter & Gamble could
make an acquisition, boosting sales.
Sales Drivers
As can be inferred from the prior discussion on consumer trade-down and trade spending, organic industry
sales growth is likely to be more gradual versus historical levels. Volume should be approaching/at a new
equilibrium base from which to grow on a normalized basis, as we believe consumer destocking and trade-
down is largely behind the industry. From a pricing perspective, trade spending intensity appears to have
peaked in CQ2 2010 and is sequentially easing to what we expect will be stabilization in calendar Q4 2010. We
believe this pricing component will be a modest positive in CY2011 given easy 2010 comparisons. The degree of
pricing ability to offset rising input costs is less certain in CY2011, but should be a modest contributor to
revenue in CY2012 as economic activity and employment gradually improve. This leaves mix as the largest
variable to sales.
Specific Procter & Gamble volume, price, mix, and other, and resultant organic growth comparisons are as
follows:
Exhibit 2.
PG Yr/Yr Comparisons
Volume Q1 Q2 Q3 Q4 FY
2010 -2.0% 5.0% 7.0% 8.0% 4.0%
2011E 7.0% 5.3% 4.5% 4.6% 5.4%
2012E 4.2% 4.5% 4.5% 4.5% 4.4%
2013E 3.8% 4.0% 4.2% 4.0% 4.0%
Price
2010 3.0% 1.0% -1.0% -1.0% 1.0%
2011E -1.0% -0.9% 0.1% 0.3% -0.4%
2012E 1.0% 1.0% 1.0% 1.0% 1.0%
2013E 1.3% 1.3% 1.3% 1.3% 1.3%
Mix/Other
2010 1.0% -2.0% -2.0% -3.0% -1.0%
2011E -2.0% -1.0% -0.5% -0.6% -1.0%
2012E -1.0% -1.0% -1.0% -1.0% -1.0%
2013E -0.8% -0.8% -0.8% -0.8% -0.8%
Organic Growth
2010 2.0% 4.0% 4.0% 4.0% 4.0%
2011E 4.0% 3.3% 4.2% 4.4% 4.0%
2012E 4.1% 4.5% 4.5% 4.5% 4.4%
2013E 4.3% 4.5% 4.7% 4.6% 4.5%
Source: Company reports and Wells Fargo Securities, LLC estimates

Note: Volume excludes the impact of acquisitions/divestitures
Note: Q111 is a reported result
Net sales for Procter & Gamble grew 1.6% yr/yr in FQ1 2011, with organic sales increasing 4%. Organic sales
were made up of (1) a 7% increase in volume (excluding acquisitions and divestitures), (2) a 1% headwind from
price, and (3) a 2% negative impact from mix and other. In FQ1 2011, Procter & Gamble saw 6-8% organic sales
growth in developing markets, compared to 1% organic sales growth in developed markets.
Management believes organic sales growth of 4-6% is achievable in FY2011, in line with the
company’s long-term guidance. However, market growth is the biggest uncertainty for sales, particularly
domestically. In FQ1 2011, domestic market growth was only 1% (and slowing sequentially), and if it stayed at
that level for the full-year, sales would be at the low end of guidance, all things equal. FQ2 2011 organic growth
is expected to be up 3-5%, with strong volume momentum continuing, partially offset by mix and pricing.
Volume trends have been extremely strong for Procter & Gamble, improving sequentially in every quarter of
FY2010, up 8% in FQ4 2010, the strongest volume growth in 22 quarters. While volume moderated slightly
sequentially, to up 7% in FQ1 2011, it was the first time in five years that P&G has had volume growth above 7%
7
for three consecutive quarters. In FQ1 2011, organic volume in developed markets grew 4%, and developing
markets grew 12%. Volume increased in all major geographic regions, 16 of the top 17 countries, five of six
business segments, and 20 of 23 billion-dollar brands. Volume improvements will likely moderate as
comparisons are getting tougher. This may be partially offset by continued volume growth from innovation, as
manufacturing was initially constrained on some new products (i.e., Fusion ProGlide).
Pricing has stabilized the past few quarters, declining 1% in every quarter since FQ3 2010. In FQ1 2011,
management attributed falling prices to earlier price reductions to improve consumer value that have not yet
annualized, partially offset by increases taken in developing regions to offset currency devaluations. Pricing will
likely begin to be a small positive contributor to sales once price adjustments annualize beginning in FQ3 2011.
Mix had an increasingly negative impact to organic sales as FY2010 progressed, though it slightly eased
sequentially in FQ1 2011, to a 2% yr/yr headwind from a 3% yr/yr headwind in FQ4 2010. FQ1 2011 negative
mix was made up of 1% negative impact from geographic mix and a 0.5% negative impact from both product
and price-tier mix. Geographic mix becomes a headwind for P&G when sales growth in developing markets is
greater than in developed markets, causing lower average selling prices for the firm. This will likely continue as
developing markets continue to outperform and as Procter & Gamble expands distribution in emerging
markets. Product mix can be a headwind if growth is faster in categories with lower prices per unit. Finally,
price-tier mix should continue be a headwind as the company introduces more mid-tier or value products. In
addition, price-tier mix can shift as consumers trade up or down to different priced products within categories.
Historically, mix has been approximately a 1% headwind to net sales.
New Products
With the probability of an elongated period before a new material consumer trade-up cycle emerges in
developed economies, the key to near- and long-term pricing power remains actual or perceived innovation as
price increases are most easily accepted by consumers (and retailers) when matched with new product
introductions. Manufacturers will likely find the most success with new products that have an easily
communicated value-add for the consumer focused in niche categories.
Procter & Gamble has a remarkable track record of product innovation, driven by the company’s successful
research & development efforts and supported by significant advertising spending. Despite the recession, the
company continued to develop innovative products across all levels of the price spectrum. The most important
recent introductions were Crest 3D White, the Pantene restage, Pampers Dry Max, Gillette Fusion ProGlide
razors and ProSeries Skin and Shave Care, and Tide with Acti-Lift. All of these major introductions took place
in FQ3 2010 and FQ4 2010, meaning there will likely be a carryover impact to FY2011 results as more
consumers try and repurchase the new products and the company expands distribution to existing markets.
Management appears to have worked through some initial manufacturing constraints on some new products
(i.e., Fusion ProGlide), which should provide ongoing volume momentum. Management has already
announced a few upcoming product introductions for the United States, including a powder formula upgrade
and compaction in February and Secret Natural Mineral Collection in March. We expect additional new
products to be announced for CY2011, but until then, management’s attention will likely be focused on
increasing market share and distribution for products already launched.
In addition to developing new premium products, management has increasingly focused on developing
products for mid-tier or value price levels. Examples include Pampers Simply Dry, Simply Venus Disposables,
Always Simply Fits, and Bounty and Charmin Basics. Procter & Gamble has also introduced a number of
value products in India, including Tide Naturals and Gillette Guard. We expect additional mid-tier or value
innovations as the domestic consumer remains very price sensitive and the company continues to tailor
products for developing markets at lower price points.
Exhibit 3.
PG New Product Introductions
New Mid-Tier or Value Geographic
Date Product Segment Geographic Area Product Innovation Expansion
2009
Feb Oral-B Toothpaste Health & Well-Being Benelux X
2009 Always Simply Fits Health & Well-Being X X
2009 Ariel Professional Household Care Turkey and Hungary X
2009 Bounce Dryer Bar Household Care X
2009 Crest and Oral-B Pro-Health Toothpaste Health & Well-Being Mexico X
2009 Febreze Air Effects Household Care Japan X
2009 Gillette Mach 3 Beauty & Grooming Developing Markets X X
2009 h&s Hair & Scalp Beauty & Grooming Japan X
2009 Olay Men's Solutions Beauty & Grooming China X
2009 Olay Natural White Household Care India and ASEAN X
2009 Olay Pro-X Beauty & Grooming Greater China X
2009 Oral-B Pro-Suade Health & Well Being Brazil (Pharmacy) X
2009 Pampers Simply Dry Household Care X X
2009 Pampers Sleep and Play Household Care X X
2009 Tide Stain Release Household Care U.S. X
Aug Crest Pro-Health Health & Well-Being China X
2H09 Ariel/Dash Stain Remover Household Care Germany, Austria, Switzerland, Italy, X
and Spain
Nov Tide Naturals Household Care India X X
8
Exhibit 3. - continued
PG New Product Introductions
2010
FY10 Olay Household Care 15 New Countries X
Feb Ariel with Actilift Household Care U.K., France, Germany, Spain, Italy, X
Greece, Portugal, Austria,
Switzerland, Sweden, Finland, and
Denmark
Feb Bounty Improvements (Bounty Basic, Bounty Napkins, Household Care U.S. and Canada X
and Bounty Huge Roll)
Feb Bounty Improvements (Bounty Extra Soft) Household Care Canada X
Feb Fekkai Advanced Beauty & Grooming U.S. X
Feb Olay Professional Pro-X Intensive Wrinkle Protocol Beauty & Grooming North America and Greater China X
Feb Pampers Underjams Household Care Western Europe X

Feb Pringles Multigrain Health & Well-Being U.S. X
Feb Simply Venus Disposables Beauty & Grooming U.S. X X
Feb Venus New Products (Embrace Disposables, Embrace, Beauty & Grooming U.S. X
Satin Care Shave Gel Reformulation, Satin Care In-
Shower Moisturizer, Bikini Trimmer)
Mar Crest 3D White Health & Well-Being North America X

Mar Crest Pro-Health Sensitive Shield (Toothpaste, Crest Health & Well-Being U.S. X
Glide Pro-Health Floss for Sensitive Gums, and Oral-B
CrossAction Pro-Health Gentle Clean Brush)
Mar Naturella Health & Well-Being Greater China X

Mar Olay Pro-X Beauty & Grooming Australia and New Zealand X
Mar Pampers Swaddlers and Cruisers with Dry Max Household Care North America X
Apr Ariel/Dash Stain Remover Household Care Belgium and Netherlands X
Apr Bounty Improvements (Bounty Extra Soft) Household Care U.S. X
Apr Bounty Improvements (Bounty) Household Care U.S. and Canada X
Apr Blend-A-Med Pro-Expert Health & Well-Being Poland X
Spring h&s Hair & Scalp Beauty & Grooming China and Taiwan X
Late May Pantene Restage Beauty & Grooming U.S. X
Mid-Jun Pampers Active Fit and New Baby with Dry Max Household Care U.K., Belgium, and Netherlands X
Jun Gillette Fusion ProGlide Razors Beauty & Grooming North America X
Jun Gillette Fusion ProSeries Skin and Shave Care Beauty & Grooming North America X
Jun Pro-Expert All In One Toothpastes and Toothbrushes Health & Well-Being CEEMEA X
(Sold Under the Blend-A-Med, Ipana, Crest, and Oral-B
Brands)
2010 Oral-B Pro-Suade Health & Well-Being Additional Brazilian Retail Outlets X
2010 Ariel/Dash Stain Remover Household Care Other Western European Countries X
Mid-Jul Charmin Improvements Household Care U.S. and Canada X

Mid-Jul Pampers with Dry Max Household Care Germany, Austria, and Switzerland X
Jul Charmin Basic Household Care Canada X

Jul Swiffer Fully Assembled Product Line-Up Household Care North America X
Jul Tide Plus (Base Tide Restage) Household Care India X
Jul Tide with Acti-Lift Household Care U.S. and Canada X
Jul Ultra Downy April Fresh Household Care U.S. and Canada X
Jul Ultra Downy Sun Blossom Household Care U.S. and Canada X
Summer Pringles Multigrain Health & Well-Being Western Europe X
Mid-Aug Gain Dishwashing Liquid Household Care U.S. X X
Mid-Aug Pampers with Dry Max Household Care France and Nordic Countries X
Mid-Aug Crest & Oral-B Pro-Health For Me Health & Well-Being U.S. X
Aug Eukanuba Relaunch Health & Well-Being North America X
Aug Febreze Air Effects Household Care Brazil, Costa Rica, Guatemala, and X
Suriname
Aug Febreze Set 'n Refresh Household Care North America and Japan X
Q310 Pantene Restage Beauty & Grooming Asia X
Q310 Crest 3D White Health & Well-Being Europe X
Q310 Naturella Health & Well-Being Brazil X
Q310 Fairy Dish Care Household Care Turkey, Egypt, and Morocco X
Q310 Swiffer Household Care Israel X
Late Aug Crest Clinical (Crest Pro-Health Clinical Gum Protection Health & Well-Being U.S. X
Toothpaste, Crest Sensitivity Clinical Sensitivity Relief
Toothpaste, and Oral-B Glide Pro-Health Clinical
Protection Floss)
Aug/Sep Febreze Set & Refresh Household Care Seven Countries in Latin America, X
including Brazil, Columbia, and Peru
Mid-Sep Gucci Guilty for Women Beauty & Grooming Global X

Sep Eukanuba Relaunch Health & Well-Being Europe X
Sep Febreze Air Effects Household Care Columbia, Venezuela, and Peru X
Sep Pampers Premium Care with Dry Max Household Care Several Countries in CEEMEA, X
including Russia, Romania, and the
Arabian Peninsula
Sep Vizir + Lenor Scent Touch Household Care Poland X
Sep Tide + Lenor Scent Touch Household Care Balkan region X
Oct Braun Multiquick 7 Cordless Beauty & Grooming Western Europe, CEEMEA, Australia, X
ASEAN, India, Japan, and Korea
Oct Gillette Guard Beauty & Grooming India X X

Oct Lenor Household Care Israel X
Oct Wella Kolestint Beauty & Grooming India X
Oct Tide Professional Whiteness Enhancer Household Care X
Fall Head & Shoulders Beauty & Grooming Brazil X
Fall Lenor New Concentrate Household Care Western Europe X
Nov Crest Pro-Health Complete Rinse Health & Well-Being U.S. X
Nov Olay Beauty & Grooming Brazil X
Dec Crest 3D White 2 Hour Express Whitestrips Health & Well-Being U.S. X
Dec Nice 'n Easy Color Blend Foam Beauty & Grooming U.K. X
Dec Olay Professional Pro-X Advanced Cleansing System Beauty & Grooming U.S. and Canada X
Dec Pampers Dry Max Household Care Expanded to 50 Countries X

FY11 Always Health & Well-Being Several Countries in Africa Including X
Kenya
FY11 Olay Beauty & Grooming 15 New Markets X
FY11 Tide Naturals Household Care Expand to Twice the Number of X
Outlets in India
9
PG Upcoming New Product Introductions
2011
Feb Powder Laundry Compaction Household Care U.S., Canada, and Puerto Rico X
Feb Tide and Gain Powder Formula Upgrades Household Care U.S. X
Feb Ultra Era Powder Detergent Household Care U.S. X X
Mar Secret Natural Mineral Collection Beauty & Grooming U.S. X
2012
Mar Pantene Restage Beauty & Grooming Expand to All Major Markets by March X
2012
Apr Gillette Fusion Pro-Glide Beauty & Grooming Expand to Over 40 Countries X
Sep Olay Beauty & Grooming Expand to 100 Markets X
Source: Company reports and Wells Fargo Securities, LLC
Note: Date reflects calendar year, unless otherwise indicated
Geographic White-Space Expansion

Geographic white-space expansion can drive incremental growth by expanding the number of
product categories sold within countries where Procter & Gamble already has a presence.
Currently, Procter & Gamble competes in 38 product categories, the products of which are sold in more than
180 countries. Looking at Procter & Gamble’s top 50 countries, the company is present in only 50% of possible
category or country combinations, an average of 19 product categories in each country. For example, Procter &
Gamble competes in only 15 product categories in China, versus 35 categories in the United States. In addition,
Procter & Gamble generally competes in five separate price tiers per category, with distribution through up to
seven separate retail channels. In the top 50 countries, P&G is present in only 34% of possible categories,
country, and price-tier, and 39% of possible categories, country, and channel combinations. By FY2015-16,
management plans on entering an additional 250 categories per country (up 25%), 750 categories per country,
per price-tier (up 20%), and 950 categories per country, per channel (up 40%) combinations. These plans
would raise the average number of categories in which the company competes to 24 from 19 in its top 50
countries. Introducing existing products to new markets, or filling “geographic white-space,” is one of the
biggest growth and margin expansion opportunities for Procter & Gamble.
Management has already announced a number expansion plans, including doubling the number of outlets
selling Tide Naturals in India by the end of FY2011 and expanding Olay to 100 markets over the next two
years, eventually aligning distribution with the Pantene franchise. Pampers Dry Max is already shipping to
more than 50 countries and growing, the Pantene restage is expected to be completed in all major markets
over the next 12-18 months, and Fusion ProGlide distribution is expected to expand to more than 40 countries
in the next two years.
Distribution
Relative to major competitors, Procter & Gamble has a significant international presence in the
Household and Personal Care industry. The company also has a large and growing footprint of sales
from emerging markets, with more relative runway compared to its close competitors in the industry. We
believe Procter & Gamble has the opportunity to increase distribution both domestically and internationally.
Exhibit 4.
International Sales
(% of total sales)
Colgate-Palmolive Co. 76.2%

Procter & Gamble Co. 62.0%
Clorox Co. 21.1%
Church & Dwight Co. 19.0%
Source: Company reports
Note: Figures based on last reported fiscal year
Domestically, consumers have shifted their buying patterns toward the club channel, mass merchants, and
dollar stores as they seek out low unit or absolute prices. We believe management will focus on increasing
distribution in these faster-growing channels and look to expand to all possible domestic category per channel
combinations. We believe that Procter & Gamble will not only continue to gain shelf space through the
introduction of new products, but should benefit as retailers consolidate among major manufacturers. Wal-
Mart/Sam’s Club represents approximately 16% of Procter & Gamble’s total revenue.
Internationally, viewing revenue geographically helps illustrate Procter & Gamble’s growth opportunities.
10
Exhibit 5. Procter & Gamble Historical Geographic Sales

($ millions) Annual Geographic Net Sales
Geographic Net Sales 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
United States $20,334 $21,198 $21,853 $23,688 $25,342 $29,462 $31,946 $31,314 $29,600 $30,000
Canada 1,322 1,698 1,568 2,016 1,894 2,602 3,233 3,020 2,611 3,154
North America 21,656 22,896 23,421 25,704 27,236 32,064 35,179 34,334 32,211 33,154
Western Europe 7,632 9,108 12,338 13,618 15,691 17,589 19,620 16,106 16,577
Japan 1,607 2,169 2,570 2,837 2,729 3,059 2,452 3,068 3,158
Other Asia 7,669 8,683
Asia 10,737 11,841
Mexico 2,301 2,368
Other Latin America 4,602 4,736
Latin America 6,902 7,104
CEEMEA 10,737 10,262
Total Latin America/CEEMEA 8,034 8,675 10,795 13,050 17,738 20,649 25,342 17,640 17,366
International 17,719 17,273 19,952 25,704 29,505 36,158 41,297 47,414 44,483 45,784
Net Sales $39,375 $40,169 $43,373 $51,407 $56,741 $68,222 $76,476 $81,748 $76,694 $78,938
Percentage Change
United States 1.5% 4.2% 3.1% 8.4% 7.0% 16.3% 8.4% -2.0% -5.5% 1.4%
Canada -13.9% 28.4% -7.6% 28.5% -6.0% 37.4% 24.2% -6.6% -13.5% 20.8%
North America 0.4% 5.7% 2.3% 9.7% 6.0% 17.7% 9.7% -2.4% -6.2% 2.9%
Western Europe 19.3% 35.5% 10.4% 15.2% 12.1% 11.5% -17.9% 2.9%
Japan 35.0% 18.5% 10.4% -3.8% 12.1% -19.8% 25.1% 2.9%
Other Asia 13.2%
Asia 10.3%
Mexico 2.9%
Other Latin America 2.9%
Latin America 2.9%
CEEMEA -4.4%
Total Latin America/CEEMEA 8.0% 24.4% 20.9% 35.9% 16.4% 22.7% -30.4% -1.5%
International -3.6% -2.5% 15.5% 28.8% 14.8% 22.5% 14.2% 14.8% -6.2% 2.9%
Net Sales -1.4% 2.0% 8.0% 18.5% 10.4% 20.2% 12.1% 6.9% -6.2% 2.9%
Percent of Net Sales

United States 51.6% 52.8% 50.4% 46.1% 44.7% 43.2% 41.8% 38.3% 38.6% 38.0%
Canada 3.4% 4.2% 3.6% 3.9% 3.3% 3.8% 4.2% 3.7% 3.4% 4.0%
North America 55.0% 57.0% 54.0% 50.0% 48.0% 47.0% 46.0% 42.0% 42.0% 42.0%
Western Europe 19.0% 21.0% 24.0% 24.0% 23.0% 23.0% 24.0% 21.0% 21.0%
Japan 4.0% 5.0% 5.0% 5.0% 4.0% 4.0% 3.0% 4.0% 4.0%
Other Asia 10.0% 11.0%
Asia 14.0% 15.0%
Mexico 3.0% 3.0%
Other Latin America 6.0% 6.0%
Latin America 9.0% 9.0%
CEEMEA 14.0% 13.0%
Total Latin America/CEEMEA 20.0% 20.0% 21.0% 23.0% 26.0% 27.0% 31.0% 23.0% 22.0%
International 45.0% 43.0% 46.0% 50.0% 52.0% 53.0% 54.0% 58.0% 58.0% 58.0%
Net Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Note: CEEMEA includes Central and Eastern Europe, the Middle East, and Africa
Note: Prior to 2008, the Japan segment includes Korea
Note: Prior to 2009, the Latin America/CEEMEA segment was named Developing Markets and includes Greater China, ASEAN,
Australasia, India, and Korea
Note: 2008 and 2009 results restated to reflect Folgers as discontinued operations as Folgers was sold in Q209
Note: 2009 results restated to reflect the global pharmaceuticals business as discontinued operations as the business was sold in Q210
11
Internationally, management has divided its worldwide operations into five geographic units: North America,
42% of FY2010 sales; Western Europe, 21%; Asia, 15%; Latin America, 9%; and CEEMEA, 13%. Procter &
Gamble’s products are sold in more than 180 countries worldwide, with on-the-ground operations in 80
countries through its Market Development Organization. Over the past ten years (FY2001-10), revenue in the
United States has increased 47.5%, while international revenue (including Canada) has increased 157.0%,
although growth rates are likely affected by acquisitions and divestitures during that time frame. International
revenue (including Canada) now represents 62.0% of revenue, versus 48.4% a decade ago. International sales
likely will continue to outpace domestic revenue, due to higher growth rates of developing economies and as
the company expands in emerging markets to achieve its goal of serving 5 billion consumers by 2015. Given
Procter & Gamble’s growing developing and emerging market presence, international distribution gains should
largely be achieved through (1) entering new markets, likely working with local companies and distributors;
(2) expanding penetration with large retailers and neighborhood stores to effectively gain share of the 35%
controlled by local manufacturers in developing and emerging markets; and (3) expanding product selection
(geographic white-space expansion) in existing countries.
Procter & Gamble has a growing exposure to developing and emerging (D&E) markets, deriving approximately
33.0% of sales from those countries (defined as all markets outside North America, i.e., the United States and
Canada, Western Europe, and Japan). Management expects revenue from D&E markets to grow to nearly 50%
of sales by FY2020. Given that exposure to D&E markets is currently smaller than for other close competitors
(i.e., Unilever, Colgate, and Henkel), we believe this allows for the company a greater relative runway to
increase D&E revenue. Sales in D&E markets totaled $26.0 billion in FY2010, up 2.9% from $25.3 billion in
FY2009. According to Procter & Gamble, the company had a 19% share as of FY 2009 in D&E markets on an
aggregate basis and is growing steadily by about half a share point per year. Growth rates are significantly
stronger in D&E markets, with organic market growth 6-8% in D&E markets, compared to organic market
growth of 1% in developed markets in FQ1 2011. Management’s strategy is to continue to increase D&E market
sales by (1) increasing penetration, (2) migrating consumers up the product scale, (3) increasing market share,
and (4) enlarging markets.
Exhibit 6.
Developing & Emerging Mkt Sales
(% of total sales)
Colgate-Palmolive Co. ~45.0%

Procter & Gamble Co. 33.0%
Clorox Co. ~16.0%
Church & Dwight Co. <5.0%

Note: Developing & Emerging markets represents countries
other than U.S., Canada, Western Europe, and Japan
Note: Figures based on last reported fiscal year
Retailers in D&E markets are generally dominated by small neighborhood stores, or high frequency stores,
which would be Procter & Gamble’s single largest customer if they were a single retailer. Large mass
merchandisers continue to expand into higher growth and less developed regions, which should also benefit
the company (e.g., Wal-Mart’s recent proposed offer to buy Massmart Holdings, Ltd. in Africa) given strong
relationships with these retailers. Generally, when entering a new market, Procter & Gamble works with local
wholesalers, while the company builds infrastructure and relationships with governments, retail trade, and
distributors. Detergents, baby care, and feminine care are normally among the first products sold as the fast
purchase cycle of these products helps drive volume and scale. While well-capitalized competitors already have
established businesses in many D&E markets, we believe Procter & Gamble will likely first take market share
from smaller local brands.
Procter & Gamble is investing aggressively in D&E markets. The company has grown appreciably in
India, while competing against well-established competitors, achieving No. 1 market share in several
categories. Business has also benefitted by a number of new products developed specifically for Indian
consumers, including Tide Naturals and Gillette Guard. P&G expanded distribution of a number of its brands
into Brazil over the past two years, including Oral-B, Pantene, Gillette, Naturella, Head & Shoulders, and
Olay. China also represents a major opportunity as the company currently has distribution reaching only one-
half to two-thirds of potential consumers.
12
Developing And Emerging Market Growth

We believe there are also opportunities for Procter & Gamble to benefit from market growth
and increases in per-capita spending in D&E markets, even in the absence of market-share
gains. For example, the size of the Chinese diaper market has grown to $2.2 billion from $200 million when
P&G entered in 2000. Despite significant growth, consumption of diapers in China and India is one-third and
one-thirtieth of consumption levels in Brazil, with diaper use indexes of 20 and 2, respectively. Simply raising
consumption of diapers in China and India to Brazil’s level represents a $2.5 billion opportunity for P&G. Per
capita consumption levels for consumers in emerging markets are well below those in developed markets.
Currently, Procter & Gamble generates approximately $11.50 of annual sales per capita worldwide. In the
United States, annual per capita sales approximate $96, while P&G annual sales per capita in D&E markets
range from approximately $3.00 in China to $0.70 in India. Management believes there is at least a $60 billion
opportunity if consumers in four large D&E markets (i.e., China, Indonesia, Sub-Saharan Africa, and India)
raise consumption levels in line with levels seen in Mexico today (approximately $20 annual per capita
spending). Finally, we have included charts from Euromonitor, which show current geographic market annual
per capita consumption levels in some key categories. While growth will likely evolve over multiple decades
and the company should face increasing competition for these consumers, we believe P&G is positioned to
capture significant growth from D&E markets.
Exhibit 7.
Growing Markets Growth Opportunities

Diaper Use Index P&G Per Capita Spending ($ US)
100 index = 4 diapers / day
$96
for children 24 months or less
125
$2.5 Billion $66
Sales Opportunity
> $60 Billion
$41
60
Sales Opportunity
$20
U.S. UK Germany Mexico C hina Indonesia Sub- India

Sahara
U.S. Brazil C hina India So urce: P &G Co mpany Repo rts Africa
So urce: P &G Co mpany Repo rts
Detergents Shampoos
Per Capita Consumption (US $) | 2010 Per Capita Consumption (US $) | 2010
$23.4
$19.9
$11.3
$15.7 $9.8
$6.6
$3.9 $2.3
$1.9 $1.9 $1.6
$0.5
India Indonesia China Brazil Germany U.S. India Indonesia China U.S. Brazil Germany
So urce: Euro mo nito r So urce: Euro mo nito r
Skin Care
Per Capita Consumption (US $) | 2010
$55.4
$32.0
$21.3
$6.6
$0.6 $2.0
India Indonesia China Brazil U.S. Germany

Source: Euro mo nito r
13
New Categories
Management is developing plans to enter new categories wherein P&G does not compete, which could provide
incremental sales opportunities. Some recent examples include Tide Dry Cleaners and Mr. Clean Car Washes.
Also, the company is working to create completely new categories, as it has done in the past with Crest
Whitestrips, Febreze, and Swiffer.
Margin
With likely mid-single-digit net sales growth for Procter & Gamble, margin improvement is an
important factor to achieve management’s long-term goal of high-single-digit to low-double-
digit EPS growth. Procter & Gamble has seen only nominal gross margin improvement over the past several
years, growing to 52.0% in FY2010 from 50.9% in FY 2005, although trends in gross margin over time are hard
to decipher with the recent divestitures of Folgers and the global pharmaceutical business. Procter & Gamble’s
gross margin has consistently been among the highest in the industry.
Exhibit 8.
Household & Personal Care Industry

Fiscal-Year Gross Margin
55.0%
50.0%
45.0%
40.0%
35.0%
2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E
So urce: Co mpany repo rts and Wells Fargo Securities, LLC estimates C HD C LX
No te: A djusted to exclude restructuring charges and o ther o ne-time items
No te: CL gro ss margin is adjusted to include shipping and handling co sts CL PG
We believe Procter & Gamble will likely continue to increase its gross margin over the next several years, led by
(1) ongoing internal cost-saving initiatives, (2) improving business and product mix, (3) manufacturing
leveraging of distribution expansion, and (4) compaction. Collectively, these benefits will likely be tempered by
increases in input costs and foreign exchange.
Procter & Gamble does not publish gross margin targets, although management believes both gross margin
and operating margin should improve in FY2011. Management thinks specific gross margin targets can create
poor performance over time and instead maintains the goal of driving shareholder value.
Scale is the most important factor to improving margin; therefore, the company has a strategic advantage
versus competitors given its size. Due to scale advantages, the company’s billion dollar brands have higher
margin, on average, than other products. Higher margin also tends to be correlated with vertically tiered
portfolios. By expanding its portfolio to encompass products ranging from value to premium, the company can
reach more customers, building scale. It also provides management the flexibility for innovation-driven pricing
at the premium end of the product spectrum.
Geographically, after-tax emerging market margin is comparable to (and in some cases, higher
than) developed market margin. While operating margin is worse for emerging markets, lower tax rates
in emerging markets improve after-tax returns. For example, Procter & Gamble’s business in China has higher
margin than both Western Europe and the company average. While expansion into developing markets may be
a near-term headwind to operating margin expansion, market penetration and category expansion should
drive scale, which should moderate the impact of these headwinds over time. Longer term, emerging market
gross and operating margin should benefit as consumers increase per-capita spending and trade up to more
expensive products.
14
Ongoing Cost Initiatives

Restructuring programs and associated cost savings will likely be a major factor in the degree of margin
improvement achieved by Procter & Gamble. Historically, the company utilized periodic restructuring
programs, approximately every five years. Management found that this encouraged a “black hole” approach by
managers, causing them to delay costs and postpone savings. In addition, management found one-time
restructuring programs to be extremely disruptive, difficult to manage, and not long-term focused.
Management now budgets ongoing annual restructuring investments, which have totaled more than $3 billion
in the past six years. Although programs are generally undertaken at the brand level, some costs may be
allocated at the corporate level for very expensive programs. Spending was elevated the past two years as
management was focused on removing stranded overhead from the Folgers and global pharmaceutical
divestitures, but has now returned to a more normalized level. In FY2011, management expects to spend
$300-400 million on restructuring projects.
Procter & Gamble’s gross margin currently trails top competitors’ for a number of product categories, despite
the company’s scale advantages. Margin improvements will likely be driven by reductions in both cost of goods
sold and the overhead portion of selling, general, and administrative expenses (which excludes advertising and
R&D). Management’s goal is to have the top gross margin in 20 benchmark categories and reduce SG&A
overhead to below that of competitors. Management believes there is an opportunity for 350-450 bps of
operating margin improvement in total. Management plans on using a portion of the savings to drive top-line
growth through innovation and geographic expansion. In FQ1 2011, Procter & Gamble had more than 200 bps
in savings from these initiatives, including 150 bps of cost savings in cost of goods sold and 60 bps of savings in
SG&A expenses. Long-term savings will likely lean more toward cost of goods sold versus SG&A expenses and
should generally approximate 100-200 bps in savings per year (excluding restructuring charges). Management
has outlined the following spending buckets in an effort to outline its framework for approaching potential cost
savings.
Exhibit 9.
PG Annual Spending (FY 2009)
(in billions)
Materials $24
Manufacturing & Logistics $13
Overhead $12
Advertising $8
Organizational excellence initiatives are focused in four general areas: (1) simplify the business, (2) simplify
processes, (3) productivity via technology, and (4) cost breakthroughs.
Procter & Gamble continues to execute initiatives to simplify its business by creating standard manufacturing
platforms and reducing the number of brands, stock-keeping units (SKU), formulas, materials, and suppliers.
Specific projects and potential annual savings detailed by management include the following:
Reduce the number of manufacturing platforms to 150 from 300, a $500 million opportunity
Reduce the number of brands in the portfolio (targeting the 150 brands that are not considered leadership
brands)
Remove half the number of small SKUs (currently 50,000 SKUs, but more than 40% contribute less than
1% of volume), a $200 million opportunity
Reduce the number of formulas and package specifications by more than 20% (currently more than
16,000 formulas and 140,000 material and package specifications), a $100 million opportunity
Standardize the color library (reduce plastic colors to 1,500 from 4,000 and paint ink colors to 200 from
10,000), a $60 million opportunity
Reduce the number of suppliers to less than 50,000 from 75,000
Other initiatives focus on efforts to simplify processes. Specific projects and potential annual savings detailed
by management include the following:
Centralize production and distribution planning to five regional centers from more than 300 locations, a
$160 million opportunity
Simplify packaging development ($5 billion spent on packaging materials and $250 million on
development costs annually) by reducing costs, time, and capacity
Target 50% bigger, better, and faster initiatives, 50% fewer smaller initiatives, and 50% capacity released
for big initiatives
Simplify internal planning and forecasting planning, a $20 million opportunity
15
Management is utilizing technology to drive productivity. Efforts in this area include (1) utilizing real-time
business intelligence, (2) building capabilities to enhance relationships with consumers, (3) increasing speed
to shelf, and (4) standardizing data flow to drive employee productivity. Examples include using virtual
shelving to reduce product mock-ups and video conferencing (saving $50 million in travel costs annually).
The final set of initiatives is driven by cost breakthroughs. Specific projects and potential annual savings
detailed by management include the following:
“Control tower” transportation management, a $200 million opportunity
Utilize alternate modes of transportation (increase rail shipments to 30% from less than 10%)
Develop alternate materials by working with suppliers (i.e., a new polymer developed for laundry powder
saved $40 million annually)
Develop alternative packaging (i.e., renewable resources)
Improve employee productivity
Business And Product Mix
Management should also achieve gross margin improvement through a gradual shift in business mix. Procter &
Gamble should see margin improvement as it prioritizes its investments toward higher-margin businesses and
a product mix shift as consumers begin to trade up to higher-margin premium products. All things equal,
margin should also improve as the company continues to introduce new products, as new products are
generally accretive to gross margin.
Distribution Leverage
Additional penetration of international markets should drive manufacturing volume leverage accretion to gross
margin. Clearly this will likely be a more gradual but both immediate- and long-term contributor to gross
margin expansion. As management focuses on increasing international operations and filling geographic
white-space, we expect gross margin to converge upward for lower-margin regions, driven by operational scale
and improving product mix.
Compaction
Laundry compaction should provide additional opportunities for cost savings. Procter & Gamble is introducing
a 33% compaction across all powder laundry detergent brands in North America beginning in February 2011,
which will likely be expanded to other global markets. Powder detergent is a shrinking segment of the laundry
market, representing approximately 40% of the U.S. market and more than 50% of the global market. Another
wave of liquid laundry compaction would likely provide a more significant benefit to margin, although it may
not provide the same degree it did in past cycles, due to the law of diminishing returns. We believe compaction
will continue to evolve across products slowly, as manufacturers attempt to ensure that they hold shelf space,
but ultimately, the resultant cost savings benefit to manufacturer and retailer margin should continue to drive
ongoing rounds of compaction.
M&A
Strategic acquisitions have been identified by management as a high priority. Since Procter &
Gamble’s acquisition of Gillette in October 2005, Procter & Gamble has made only small acquisitions, with the
largest being Ambi-Pur in July 2010 and management has indicated that it favors small acquisitions. While we
do not think management is fundamentally opposed to large acquisitions, we believe they are a low probability.
In addition, we believe there are simply not many sizeable acquisition candidates left that would not raise anti-
trust issues. When looking to acquire a company, management has outlined the following requirements:
ŀ Enhance top-line growth
ŀ Enhance company margin
ŀ Global business, or has the ability to globalize
ŀ Adjacent to current segments (not outside the company’s core competencies)
In addition, the acquisition must be available for purchase (Procter & Gamble does not make hostile
acquisitions), able to clear anti-trust regulators, and financially viable. When examining valuation,
management typically uses a simple net present value (NPV) calculation based on long-term cash flow into
perpetuity. The company is generally very conservative with top-line growth projections (viewed as the biggest
unknown). Once the acquisition is made, P&G has a strong record of driving out costs, due to experience
integrating numerous prior acquisitions, along with leveraging the company’s scale. Management has a wish
list and is ready if the right acquisition appears.
Competition for viable acquisition candidates is generally from three sources: (1) other companies in the
industry, (2) pharmaceutical companies looking for consumer exposure, and (3) private equity firms looking to
put capital to work in stable, growing free cash flow sectors. In addition, pharmaceutical companies have been
more active in the space.
16
Procter & Gamble has been active recently making divestitures, highlighted by the divestitures of Folgers and
its global pharmaceutical business. We believe future divestitures will continue to be made on a periodic basis,
in businesses that are lower-growth, lower-margin, and outside the company’s core categories. Pringles seems
to be a brand that could potentially be divested as it is the last remaining food brand owned by P&G. However,
we believe any deal would have to compensate the company for what (1) would likely be a large tax impact
from a sale, and (2) we believe are above food industry operating margin.
Exhibit 10.
Acquisitions
Price (in millions)
Date Company Cash Other Total Notes Segment
Jun-04 China Joint Venture $1,850 $1,850 Acquired the remaining 20% stake in the China joint venture from its
partner, Hutchison Whampoa China Ltd
Jun-04 Wella AG $1,110 $1,110 Entered into a Domination and Profit Transfer Agreement in which the Beauty Care
Company is entitled to exercise full operating control and receive 100% of
the future earnings of Wella.
2004 Pharmaceutical business in Spain Acquired a pharmaceutical business in Spain Health, Baby & Family
Care
2004 Fabric and home care business in Acquired a fabric and home care business in Europe Health, Baby & Family
Europe Care
2005 Glad joint venture Increased ownership in the Glad joint venture with The Clorox Company Household Care
Oct-05 Gillette $53,430 $53,430 Acquired Gillette, which markets consumer products such as Gillette razors Various
and blades including the Mach3 and Venus brands, Duracel batteries, Oral-
B manual and power toothbrushes, and Braun shavers and small
appliances.
Q106 Wella AG $0 $0 During Q106, a portion of the remaining shares were tendered, resulting Beauty Care
in a $944 million reduction in our liability under the Domination Agreement
and ownership of 96.9% of all Wella outstanding shares
2006 Minor acquistions Several minor acquisitions in fabric care, health care, and Duracell Various
2006 Licensing agreements Licensing agreements with Dolce & Gabbana and Gucci
2007 Minor acquistions Several minor acquisitions, primarily in Beauty and Health Care Beauty and Health
Q408 Frederic Fekkai Acquired Frederic Fekkai, a premium hair care brand Beauty & Grooming
Q109 Nioxin Acquired Nioxin, a leader in the scalp care professional hair care market Beauty & Grooming
Q210 MDVIP Acquired MDVIP, a physicians' network focused on preventative medicine Health & Well-Being
May-10 Natura Pet Products, Inc. On 05.05.10, agreed to acquire Natura Pet Products, Inc., a privately-held Health & Well-Being
pet food business based in Davis, CA. Natura's brands include Innova,
Evo, California Natural, Healthwise, Mother Nature and Karma. These
brands are sold in a limited number of pet specialty stores and through
veterinarians, mainly in the United States and Canada. Terms of the deal
were not disclosed.
Jul-10 Ambi Pur $470 $470 In July 2010, the Company acquired Ambi Pur, a leading global air care Household Care
brand with a presence in 80 countries, as well as several toilet care
products with a strong presence in Western Europe and Asia from the Sara
Lee Corporation for 320 million euro, or $470 million. The Ambi Pur brand
generated annual sales of approximately 260 million euro and estimated
operating income of 24 million euro for the year ending June 2009, using
an exchange rate of 1.37 dollars per euro.
Divestitures
Price (in millions)
Date Company Cash Other Total Notes Segment
Q105 Juice business Health, Baby & Family
Divested its juice business including the Sunny Delight and Punica brands Care
to J.W. Childs Associates, L.P., a Boston-based private equity firm. Gain on
divestiture was $0.03 or $83.0 million after-tax.
Q206 SpinBrush Divestiture Divested the SpinBrush battery toothbrush business to Church & Dwight Beauty & Health Care
Co., Inc. as part of the regulatory approval process with the European
Commission as part of the Gillette acquisition
2006 Rembrandt and Right Guard brands Various
Divested Rembrandt, a Gillette oral care product line, and Right Guard and
other Gillette deodorant brands as part of the regulatory review process
with the FTC as part of the Gillette acquisition
2006 Korea Paper Business Divested its Korea paper business Household Care
Q107 Pert and Sure Sold Pert business in North America and Sure Beauty & Health Care
2007 Nonstrategic Beauty brands Divested several nonstrategic minor Beauty brands Beauty and Health
Q108 Adult incontinence business in Japan Sold its adult incontinence business in Japan Health & Well-Being
Q208 Western European Family Care Divested its Western European Family Care business Household Care
business
Q109 ThermaCare, Dantrium, and Dryel Divested the ThermaCare, Dantrium, and Dryel brands Various
Nov-08 Folgers $2,466 $2,466 Divested the Coffee business into the J.M. Smucker Company in an all- Health & Well-Being
stock reverse Morris Trust transaction.
Q209 Noxzema and Western European Tissue Sold the Noxzema and Western European Tissue businesses Various
2009 Infusium Sold the Infusium brand Beauty & Grooming

Q110 Actonel in Japan Sold the Actonel business in Japan Health & Well-Being
Oct-09 Global Pharmaceuticals business $2,800 $2,800 Sold the global pharmaceuticals business to Warner Chilcott plc including Health & Well-Being
the portfolio of branded parmeceutical products including Asacol HD,
Actonal, and Enablex, the perscription drug product pipeline and
manufacturing facilities in Puerto Rico and Germany, and the majority of
the 2,300 employees were transferred
Note: Date reflects fiscal year , unless otherwise indicated
17
Procter & Gamble -- Business Overview

Business Segments
Procter & Gamble has structured its organization into three global business units (GBU): beauty and grooming
(33.8% of FY2010 and an estimated 34.1% of FY2011 net sales), health and well-being (18.2% of FY2010 and
an estimated 18.1% of FY2011 net sales), and household care (48.0% of FY2010 and an estimated 47.8% of
FY2011 net sales), which are supported by the company’s global operations, global business services, and
corporate functions operations. The company has six reportable segments within the GBU structure:
Beauty and grooming GBU: beauty, grooming
Health and well-being GBU: health care and snacks
Household Care GBU: fabric and home care, baby care, and family care
Procter & Gamble’s largest product categories are laundry (approximately 17% of net sales), located in the
fabric care and home care segment and diapers (approximately 11% of net sales), found in the baby and family
care segment.
Brands
Household and Personal Care companies differentiate their products through the strength of their brands.
Strong brands are built over many years through quality, innovation, and developing brand loyalty by word of
mouth and advertising. Strong brands command a wide base of distribution, which, in turn, drives gains in
market share and shelf space. There is no other consumer products company that owns a stable of brands as
strong or as deep as Procter & Gamble.
Procter & Gamble has 23 billion-dollar brands. The most recent addition was Ace, which crossed the threshold
in FY2009. As of FY2009, 12 of the billion dollar-brands were the No. 1 global market-share leaders of their
categories, with the majority of the balance No. 2. From FY2000 to FY2009, the company’s billion-dollar
brands grew at an average rate of 11% per year, stronger than total company revenue growth. In addition,
Procter & Gamble has 27 other brands with revenue of approximately $500 million to $1 billion (although
revenue may occasionally fluctuate below this threshold, primarily due to currency). In FY2010, these 50
“leadership brands” contributed 90% of the company’s sales and operating profit. While the number of
leadership brands far outnumbers that of other competitors, management’s priority remains the strength of its
brands, as opposed to the number of brands. In general, Procter & Gamble’s products are positioned in the
super-premium, premium, mid-tier, and value price ranges. The company does not generally compete in the
low-tier economy price range.
The company’s brand portfolio is more heavily weighted toward fast-growing personal care categories than its
major competitors. Although P&G does also have exposure to slower-growing home care categories, we believe
the company’s scale provides it with industry-leading margin for those products. The product portfolio also
allows P&G to enter developing and emerging markets with fast purchase cycle products (i.e., detergents, baby
care, and feminine care) to quickly build scale. We believe Procter & Gamble’s has the most broadly diversified
product portfolio, which is a strategic advantage over global competitors.
18
Exhibit 11.
Reporting Segments Business Units Categories Adjacencies Brands International
6 16 38 74 Brands
Household Care Baby & Family Care Baby Care Diapers Diapers
Business Units: 5 Baby Wipes Baby Wipes Luvs**
Categories: 12 Dodot
Childrens' Personal Pampers*
Adjacencies: 18
Care
Family Care Tissues Tissues Puffs**
Toilet Paper Toilet Paper Charmin*
Paper Towels Paper Towels Bounty*
Fabric & Home Care Fabric Care Additives Additives Tide* Ace*
Bleach Ace*
Fabric Enhancers Fabric Enhancers Bounce** Fairy
Downy* Gala
Febreze Lenor
Gain*
Laundry Laundry Cheer Ace*
Dreft Laundry Ariel*
Era Alomatik
Gain* Bold**
Ivory Snow Bonux
Tide* Dash**
Daz
Fab
Myth
Rindex
Salvo
Sarasa
Tempo
Vizir
Home Care Air Care Air Care Febreze** Ambi Pur
Dish Care Hand Dish Wash Dawn* Dreft Dish
Gain* Fairy
Ivory
Joy
Auto Dish Wash Cascade** Fairy
Surface Care Cleaning Systems
Hard Surface Wipes Swiffer**
Hard Surface Sprays Mr. Clean** Ace*

Mr. Proper
Viakal
Batteries Batteries Alkaline Batteries
Duracell*
Rechargable Batteries
Health & Well- Health Care Feminine Care Feminine Care Wipes Ausonia
Being Liners Always* Naturella
Business Units: 5 Pads Whisper
Categories: 11
Adjacencies: 20 Tampons Tampax** Discreet
Evax
Naturella
Incontinence Incontinence Linidor
Oral Care Toothbrush Power Toothbrush Oral-B*
Manual Toothbrush Crest*
Oral-B*
Toothpaste Toothpaste Crest* Fluocaril
Oral-B*
Other Oral Care Oral Rinse Crest*
Scope
Floss Crest*
Oral-B*
Dentures Fixodent**
Whitening Crest*
Personal Health Gastrointestinal Gastrointestinal Align
Care Metamucil
Pepto-Bismol
Prilosec OTC**
Respiratory Respiratory Vicks**
Water Filtration Water Filtration PUR
Rapid Diagnostics Rapid Diagnostics
Snacks & Pet Care Snacks Snacks Snacks Pringles*

Pet Care Pet Care Dog Food Eukanuba**
Cat Food Iams*
Pet Supplements Natura Pet Products
19

Beauty & Beauty Retail Hair Care Hair Care Shampoo Anna Sui
Grooming Aussie
Business Units: 6 Conditioner Head & Shoulders* Rejoice**
Categories: 15
Adjacencies: 36
Herbal Essences**
Pantene*
Hair Styling Hair Styling Aussie
Herbal Essences**
Pantene*
Hair Color Color Herbal Essences**
Natural Instincts
Nice 'n Easy**
Prestige Products Prestige Products Premium Cosmetics
Fragrances Burberry Bruno Banani

Fragrances
Christina Aguilera Mexx
Perfumes
Dolce & Gabbana** Rochas
Dunhill Fragrances
Escada Fragrances
Ghost
Gucci Fragrances
HUGO BOSS**
Lacoste Fragrances
Naomi Campbell
Puma
Valentino
Premium Skin Care DDF SK-II**
SK-II**
Salon Professional Salon Professional Professional Shampoo Fekkai
Halo
Professional Nioxin
Conditioner Londa Professional
Sebastian Professional
Professional Hair Vidal Salssoon
Styling Wella*
Professional Color Fekkai Londa Professional
Halo
Sebastian Professional
Vidal Sassoon
Wella*
Female Beauty Skin Care Cleansers Anna Sui Camay
Ivory
Olay*
Safeguard**
Zest
Moisturizers Anna Sui
Olay*
Pharmacy Hair
Channel Skin
Cosmetics Cosmetics - Lips Anna Sui
Cosmetics - Eyes CoverGirl** Ellen Betrix
Cosmetics - Face Max Factor**
Antiperspirant & Female Antiperspirant Secret** Infasil
Deoodorant & Deodorant
Female Personal
Female Personal Cleansing
Cleansing
Female Shave Female Disposable Venus** Prestobarba/Blue**
Care Razors
Female Premium
Blades & Razors Venus**
Female Shave Prep
Grooming Male Grooming Male Blades & Male Disposable Gillette* Prestobarba/Blue**
Razors Razors
Male Premium Blades Fusion*
& Razors MACH3*
Male Personal Male Antiperspirant & Gillette* Infasil
Care Deodorant Old Spice**
Male Skin Care Fusion*
Gillette*
Old Spice**
Male Personal Gillette*
Cleansing Old Spice**
Male Hair Care Gillette*
Male Fragrances Old Spice**
Male Shave Prep Fusion*
Gillette*
Appliances Beauty Female Electrical Hair
Electronics Removal
Male Dry Shavers Braun*
Hair Care Appliances

Home Small Coffee & Hot
Appliances Beverage Makers
Braun*
Hand Held Appliances
Note: * Denotes a Billion Dollar brand
Note: ** Denotes a Leadership brand
20
Market Share
Procter & Gamble holds the largest market share of the global household and personal care market.
Exhibit 12.
PG Global Market Share (FY 2009)
Market Size
Segment (in billions) Market Share Rank
Household Care $200 20% #1

Beauty & Grooming $300 13% #1
Consumer Healthcare $240 5% #2
Exhibit 13.
Market Size
Business Unit (in billions) Market Share Rank
Household Care
Fabric Care $74 29% #1
Home Care $40 18% #2
Baby Care $36 34% #1
Family Care (1) $19 31% #1
Batteries $16 26% #1
(1) Includes only North America and Mexico
Exhibit 14.
Market Size
Business Unit (in billions) Market Share Rank
Health Care
Oral Care $32 22% #2
Feminine Care $19 34% #1
Personal Health Care $41 6% #2
Procter & Gamble has approximately 20% market share in markets in which it competes today. Management
expects to increase market share 10-20 bps annually in FY2011 and onward, with market-share gains
contributing 0.5-1.0% in incremental annual sales growth. Market-share gains have accelerated in recent
quarters and are broad-based, with share growth seen in all geographic regions in the latest quarter. In FQ1
2011, Procter & Gamble held or grew market share in 13 of its 17 top countries and 17 of its 23 billion-dollar
brands, and saw share growth in 60% of its brand portfolio.
Private label goods are competitors to Procter & Gamble, although they command only a small percentage of
the market. According to the company’s stats, branded products account for 88% of the sales in the categories
in which Procter & Gamble competes. Geographically, the private label business is most developed in Western
Europe. Private label goods did experience an uptick in demand during the recession; however, share gains
have eroded as the recession ended and consumers returned to branded goods. Private label market share was
flat to down globally in FQ1 2011.
Approximately 50% of Procter & Gamble’s domestic sales are tracked by Nielsen.
Sales And Earnings Seasonality
Since FY2007, Procter & Gamble’s segment sales and earnings appear to be slightly skewed toward FH1,
perhaps reflecting slight holiday seasonality. Segment earnings before taxes demonstrate a similar seasonal
pattern over the FY2007-FY2010 periods. Although none of the company’s segments are highly seasonal,
certain products are seasonal in nature, including batteries (fabric care and home care), appliances
(grooming), and prestige fragrances (beauty), where sales are typically higher in the fall due to the holidays. In
addition, anticipation or occurrence of natural disasters, such as hurricanes, can drive unusually high demand
for batteries.
21
Exhibit 15.
Seasonality of Sales: Avg. 2007-2010
Segment Q1 Q2 Q3 Q4
Beauty and Grooming GBU
Beauty 25.1% 26.2% 23.9% 24.8%
Grooming 25.4% 26.9% 23.0% 24.6%
Health and Well-Being GBU
Health Care 25.7% 26.0% 24.4% 23.9%
Snacks and Pet Care 24.2% 26.1% 24.3% 25.4%
Household Care GBU

Fabric Care and Home Care 25.9% 25.7% 24.0% 24.5%
Baby Care and Family Care 25.0% 24.8% 25.3% 24.9%
Total Business Segments 25.4% 25.9% 24.2% 24.6%
Corporate 29.8% 18.3% 27.7% 24.3%
Total Company 25.3% 26.0% 24.1% 24.6%
Seasonality of EBT: Avg. 2007-2010
Segment Q1 Q2 Q3 Q4
Beauty 26.5% 30.6% 22.0% 20.9%
Grooming 27.7% 28.3% 22.2% 21.7%
Health Care 27.2% 27.7% 24.2% 20.9%
Snacks and Pet Care 21.3% 27.7% 24.4% 26.6%
Household Care GBU
Fabric Care and Home Care 27.5% 25.6% 23.2% 23.7%
Baby Care and Family Care 26.7% 25.0% 26.4% 21.9%
Total Business Segments 26.9% 27.4% 23.6% 22.1%
Corporate 20.9% 23.0% 22.9% 33.2%
Total Company 27.7% 28.0% 23.7% 20.6%

Note: 2008 and 2009 results restated to reflect Folgers as discontinued
operations as Folgers was sold in Q209
Note: Effective 09.01.09, the Company implemented changes to the
organization structure of the Beauty GBU. Results prior to FY 2009
do not reflect these changes.
Note: 2009 results restated to reflect the global pharmaceuticals business
as discontinued operations as the business was sold in Q210
Advertising And R&D

Procter & Gamble is the largest corporate advertiser, spending $8.6 billion (10.9% of sales) on advertising in
FY2010. Advertising spending has been relatively consistent over the past ten years, fluctuating between
approximately 10% and 11% of sales. Beginning in 2003, the company noticeably increased its marketing to the
high end of its historical range, where it has remained, with the exception of FY2009 (low media rates and
favorable foreign exchange). Procter & Gamble does not break out advertising spending on a quarterly basis,
but it is likely that the FY2010 increase was to support the strong slate of new products in FH2 2010.
Management expects advertising to increase in line with sales in FY2011.
R&D spending has fallen consistently to 2.5% of sales since FY2001 from a rate of 4.5% of sales, although part
of this decline was likely affected by the sale of the global pharmaceutical business. We are not particularly
concerned with the declining level of spending as a percentage of sales, as the company spends more as a
percentage of sales than those in the industry and many times, its close competitors in nominal terms. The
lower level of R&D spending as a percentage of sales is also likely due in part to improved productivity (same
innovation for less dollars) and the expanded use of outside partnerships (goal to source 50% of ideas
externally). Finally, the number and quality of recent new product introductions continue to be strong, which
we expect to continue to be the case.
22
Procter & Gamble’s global research & development footprint has historically been located in developed markets
(in 27 technical centers worldwide). Management has recently undertaken a project to shift its footprint to better
match expected growth in D&E markets, planning on doubling its presence in the coming years. This should allow
the organization to be closer to D&E market consumers and harvest highly talented local graduates.
Exhibit 16. Procter & Gamble Historical Advertising And SG&A Expense
($ millions) Annual Selling, General and Administrative Expense
SG&A Expense 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Net Sales $39,375 $40,169 $43,373 $51,407 $56,741 $68,222 $76,476 $81,748 $76,694 $78,938
SG&A Expense
Advertising 3,729 3,782 4,487 5,466 5,929 7,122 7,937 8,583 7,519 8,576
Research and Development 1,769 1,601 1,665 1,802 1,940 2,075 2,112 2,212 1,864 1,950
Other SG&A 6,090 6,669 6,857 9,614 10,531 12,651 14,291 14,780 13,247 14,193
Total SG&A Expense $11,588 $12,052 $13,009 $16,882 $18,400 $21,848 $24,340 $25,575 $22,630 $24,719
Percent Change
Net Sales -1.4% 2.0% 8.0% 18.5% 10.4% 20.2% 12.1% 6.9% -6.2% 2.9%
SG&A Expense
Advertising -4.5% 1.4% 18.6% 21.8% 8.5% 20.1% 11.4% 8.1% -12.4% 14.1%
Research and Development -6.8% -9.5% 4.0% 8.2% 7.7% 7.0% 1.8% 4.7% -15.7% 4.6%
Other SG&A -4.3% 9.5% 2.8% 40.2% 9.5% 20.1% 13.0% 3.4% -10.4% 7.1%
Total SG&A Expense -4.8% 4.0% 7.9% 29.8% 9.0% 18.7% 11.4% 5.1% -11.5% 9.2%
Percent of Sales
SG&A Expense
Advertising 9.5% 9.4% 10.3% 10.6% 10.4% 10.4% 10.4% 10.5% 9.8% 10.9%
Research and Development 4.5% 4.0% 3.8% 3.5% 3.4% 3.0% 2.8% 2.7% 2.4% 2.5%
Other SG&A 15.5% 16.6% 15.8% 18.7% 18.6% 18.5% 18.7% 18.1% 17.3% 18.0%
Total SG&A Expense 29.4% 30.0% 30.0% 32.8% 32.4% 32.0% 31.8% 31.3% 29.5% 31.3%

Manufacturing
Procter & Gamble has a significant global manufacturing presence, with the vast majority of manufacturing
done in-house and only a minimal amount contracted to third parties. The company has 19 new factories under
construction, with about five starting up and five on the drawing board. As with other companies in the
industry, the decision to own local country manufacturing or import from other regions is driven by the
financial trade-off between local manufacturing costs (i.e., labor, input, and foreign exchange) and geo-
political risks, versus incurring transportation and duty costs once a given level of scale is achieved.
Corporate Strategy
Procter & Gamble’s Bob McDonald issued his purpose-inspired growth strategy shortly after taking over as
CEO in 2009. Tied closely to the new growth strategy, the company’s purpose is simply stated: “We will grow
by touching and improving the lives of more consumers in more parts of the world…more completely.” To
achieve growth, management plans to create new opportunities through the following:
ŀ Growing core businesses
ŀ Winning with underserved and unserved consumers, and
ŀ Developing faster-growing, structurally attractive businesses with global leadership potential
Besides focusing on organically growing the core business (leadership brands) and expanding to underserved
markets, management is trying to capitalize on opportunities in faster-growing businesses in which it already
competes. Management’s stated goal is to continue to shift P&G’s business portfolio toward the beauty and
health market segments and several household care categories. We expect the majority of the company’s
acquisitions and capital investment to take place in these areas.
In line with the company’s new purpose, CEO McDonald has stated the goal of serving 5 billion consumers by
2015. In FY2010, management stated it had reached an additional 200 million consumers, bringing the total
served to 4.2 billion. To reach new underserved consumers, the company plans to implement the following:
ŀ Innovate its product portfolio vertically up and down value tiers, focused specifically on serving price-
conscious consumers with mid-tier and value-tier alternatives
ŀ Introduce the existing product portfolio into new geographic markets, increasing its presence in developing
markets, and
ŀ Broaden brands and enter adjacent categories, building scale, reducing costs, and profitably building
market share
23
One of the company’s central goals is to reach new consumers in fast-growing emerging markets, where
consumers are underserved and the company can leverage its existing product portfolio, along with new lower-
priced products to gain penetration and benefit from consumer trade-up as emerging market economies evolve.
Capital Structure And Deployment
Procter & Gamble has historically employed a conservative capital structure, which has resulted in a high grade
credit rating (currently AA3 from Moody’s and AA- from S&P). The company generated more than $13.0
billion in free cash flow in FY2010, or 16.5% of sales. The large nominal amount of free cash gives management
exceptional flexibility to operate its business and return excess cash to shareholders. Within that context,
management has outlined the following priorities for uses of free cash:
ŀ Funding the business
ŀ Dividends
ŀ Strategic acquisitions
ŀ Share repurchase
Funding the business is the highest priority and management intends to keep capital expenditure at or below
4% of sales. The dividend has been increased for 53 consecutive years, and we imagine that the current
management team does not intend to break that streak. Over that time, the average annual increase was 9.5%,
although we are mindful that management also views a payout ratio above 50% as high. Acquisitions are the
next priority, although management currently favors small acquisitions over large ones. We expect acquisitions
and capital investments to be focused in the beauty and health market segments and select household care
categories. Remaining funds have historically been returned to shareholders through share repurchases, with
the company repurchasing approximately $42.4 billion in stock between FY2005 and FY2010.
Exhibit 17.
PG Share Repurchases
Period Shares Price per Share Total Cost
Q105 - - -
Q205 - - -
Q305 29.739 $53.09 $1,579
Q405 26.373 $54.71 $1,443
Q106 100.442 $55.26 $5,550
Q206 61.007 $56.57 $3,451
Q306 26.324 $58.75 $1,546
Q406 108.840 $57.23 $6,229
Q107 4.875 $56.43 $275
Q207 - - -
Q307 - - -
Q407 - - -
Q108 40.329 $64.03 $2,582
Q208 39.912 $71.77 $2,864
Q308 37.310 $67.87 $2,532
Q408 29.705 $67.54 $2,006
Q109 58.865 $66.26 $3,900
Q209 20.568 $64.48 $1,326
Q309 19.037 $58.80 $1,119
Q409 - - -
Q110 - - -
Q210 22.778 $61.65 $1,404
Q310 31.935 $62.62 $2,000
Q410 41.811 $61.85 $2,586
Q111 49.817 $60.28 $3,003
Source: Company Reports and Wells Fargo Securities, LLC
Note: In millions, except per share data
24
Guidance
Procter & Gamble has outlined long-term annual diluted EPS growth of high single to low double digits,
assuming a normalized commodity and foreign exchange environment. To achieve this growth, management
expects to realize the following annual objectives:
Organic sales growth of 4-6%
Free cash flow productivity (operating cash flow less capital expenditure, divided by net earnings) of 90%
or greater
Capital spending at or below 4% of net sales
Long-term organic sales growth is expected to be 4-6%, which is made up of 3-4% market growth, plus 1-2% of
share growth. The 3-4% market growth outlook assumption is the biggest swing variable and management
plans to continue to monitor and update long-term assumptions accordingly. Market growth rates will likely be
lower than historical due to depressed growth in developed markets, with expected organic growth in the
developed markets (i.e., United States and Western Europe) of 1-2%, versus historical rates of growth above
3%. Share growth guidance includes 0.5-1.0% (potentially more in some years) of growth from portfolio,
adjacencies, and regimens (innovation) and 0.5%-1.0% from market growth (10-20 bps per year in global
market-share gains).
In FY2011, management expects diluted EPS of $3.91-4.01, up 7-9% yr/yr over FY2010 core EPS of $3.67.
Yr/yr EPS growth rates will likely be heavily influenced by prior-year trends in commodity costs, foreign
exchange rates, and marketing spending. Other elements of management’s FY2011 outlook include the
following:
Organic sales growth of 4-6%
Sales growth of 3-5%
Advertising increasing in line with sales
Gross margin and operating margin improvement
Tax rate of 27-28%, excluding any one-time items
Capital spending approximately 4% of sales
Share repurchases of $6-8 billion
Management’s organic sales growth target of 4-6% includes estimated market growth of 3-4%. Market growth
is expected to be weighted toward developing markets, which are expected to grow 6-8%, versus 1-2% in
developing markets. Mix is expected to continue to have a negative impact on sales growth, due to faster
growth in developing markets. Management expects pricing to be neutral to slightly positive in FY2011. Pricing
will likely be negative in FH1 2011, turning positive in FH2 once yr/yr adjustments have been annualized. The
company plans to continue to monitor and adjust price gaps, depending on competitive actions, and expects
modest changes in promotional spending. Management expects foreign exchange to be a 1-2% headwind to
sales, partially offset by a neutral to 1% benefit from the net impact of acquisitions and divestitures, arriving at
the 3-5% net sales growth estimate. Management has seen a moderating foreign exchange headwind, offset by
an increase in commodity costs.
In FQ2 2011, management estimates diluted EPS of $1.05-1.11, down 5% to up 1% yr/yr, versus core EPS of
$1.10. Core EPS is expected to be down yr/yr, due to difficult base period comparisons, driven primarily by
higher commodity costs and marketing spending as a percentage of sales. Organic sales are estimated to grow
3-5%, with strong volume momentum partially offset by mix and pricing. Net sales are expected to increase
2-4%, with a 2% negative impact from foreign exchange expected to be partially offset by a 1% positive impact
from acquisitions and divestitures.
Estimates
Our FY2011 and FY2012 revenue estimates are in line with the consensus, but slightly below estimates in
FY2013, driven by 4.0%, 4.4%, and 4.5% organic sales growth. Our organic growth estimates are slightly below
the midpoint of long-term guidance, due to expected slow category growth, while EPS estimates should return
to low-double-digit growth, supported by modest margin improvements and share repurchases. Our EPS
estimates are virtually in line with consensus estimates for both FY2011 and FY2012, but slightly above
estimates in FY2013. We believe the Street may not be factoring in as much operating margin expansion or
share repurchases in FY2013.
25
Exhibit 18.
($ millions)
Procter & Gamble Co. (PG) Revenue Estimates (in millions)
Q211 2011 2012 2013
Our Est Street Street Range Our Est Street Street Range Our Est Street Street Range Our Est Street Street Range
$21,686 $21,569 $21,111-$21,729 $81,873 $82,122 $81,032-$83,139 $85,446 $85,728 $84,007-$87,470 $89,321 $91,119 $89,309-$92,140
Source: First Call and Wells Fargo Securities, LLC estimates
Exhibit 19.
Procter & Gamble Co. (PG) EPS Estimates
Q211 2011 2012 2013
Our Est Street Street Range Our Est Street Street Range Our Est Street Street Range Our Est Street Street Range
$1.10 $1.10 $1.07-$1.12 $3.98 $3.98 $3.95-$4.03 $4.39 $4.37 $4.28-$4.45 $4.85 $4.79 $4.70-$4.87
Source: First Call and Wells Fargo Securities, LLC estimates
FQ2 2011E. Our EPS estimate of $1.10, which incorporates our estimate of 3.3% organic sales growth.
FY2011E. Our $3.98 EPS estimate is based upon 4.0% organic revenue growth, made up of 5% volume
growth (excluding acquisitions and divestitures), no impact from pricing, and a 1% negative impact from mix
or other. We estimate foreign exchange to be a 1% headwind to sales, offset by a 1% volume benefit from
acquisitions. Total net sales growth is estimated to be 3.7%. We estimate that sales growth will be strongest in
the grooming, health care, beauty, and fabric care and home care segments (up 6%, 5%, 4%, and 4%,
respectively), and weaker in the baby care and family care and snacks and pet care segments (up 3% and down
3%). We believe gross margin will decline 26 bps as higher yr/yr input costs more than offset cost savings from
restructuring initiatives. We believe operating margin will increase 24 bps as selling and administrative
expenses (30.8% of sales) fall due to leverage and overhead savings. We estimate that Procter & Gamble will
repurchase $7.1 billion in stock.
growth (excluding acquisitions and divestitures), a 1% impact from pricing, and a 1% negative impact from mix
and other. We estimate foreign exchange and acquisitions and divestitures will be neutral to sales. Total net
sales growth is estimated to be 4.4%. We estimate sales growth will be strongest in the beauty, grooming, and
fabric care and home care segments (up 5% each), and weaker in the health care, baby care and family care,
and snacks and pet care segments (up 4%, 4%, and 3%). We believe gross margin will expand 25 bps, driven by
cost savings from restructuring initiatives. We believe operating margin will increase 21 bps as selling and
administrative expenses (30.9% of sales) increase slightly as a percentage of sales. We estimate Procter &
Gamble will repurchase $9.1 billion in stock.
growth (excluding acquisitions and divestitures), a 1% impact from pricing, and a 1% negative impact from mix
and other. We estimate foreign exchange and acquisitions and divestitures will be neutral to sales. Total net
sales growth is estimated to be 4.5%. We estimate sales growth will be strongest in the beauty, grooming,
health care, and baby care and family care segments (up 5% each), and weaker in the fabric care and home care
and snacks and pet care segments (up 4% and 3%). We believe gross margin will expand 25 bps, driven by cost
savings from restructuring initiatives. We believe operating margin will increase 17 bps as selling and
administrative expenses (30.9% of sales) increase slightly as a percentage of sales. We estimate Procter &
Gamble will repurchase $9.2 billion in stock.
Stock Performance Seasonality
Median stock performance since 1986 is strongly weighted toward CH2. Relative returns versus the
S&P 500 are best during the August through October period, with the best returns occurring in September. The
stock tends to underperform the market early in the calendar year, with the worst returns usually occurring in
April.
26
Exhibit 20.

Median Monthly Return
4%
3%
2%
1%
0%
-1%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: FactSet and Wells Fargo Securities, LLC
Note: Since Jan 1986

Median Monthly Return vs S&P 500
4%
3%
2%
1%
0%
-1%
-2%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Note: Since Jan 1986
27
Models
Procter & Gamble Co. (Dollars in millions, except per share data)
Segment Net Sales
Updated: 01.19.11
Wells Fargo Securities, LLC
Annual Segment Net Sales
Segment Net Sales 2005 2006 2007 2008 2009 FY10 FY11E FY12E FY13E
Beauty $15,909 $16,687 $17,889 $19,515 $18,924 $19,491 $20,275 $21,247 $22,258
Grooming 10 5,114 7,437 8,254 7,408 7,631 8,047 8,430 8,830
Health Care 9,880 11,831 13,381 14,578 11,288 11,493 11,941 12,453 13,013
Snacks and Pet Care 4,314 4,383 4,537 3,204 3,114 3,135 3,112 3,213 3,309
Household Care GBU
Fabric Care and Home Care 15,796 18,918 21,469 23,714 23,186 23,805 24,684 25,807 26,871
Baby Care and Family Care 11,652 11,972 12,726 13,898 14,103 14,736 15,067 15,676 16,459
Total Business Segments 57,561 68,905 77,439 83,163 78,023 80,291 83,125 86,826 90,741
Corporate (820) (683) (963) (1,415) (1,329) (1,353) (1,252) (1,380) (1,420)
Total Company $56,741 $68,222 $76,476 $81,748 $76,694 $78,938 $81,873 $85,446 $89,321
Percentage Change
Beauty 4.9% 7.2% 9.1% -3.0% 3.0% 4.0% 4.8% 4.8%
Grooming 51040.0% 45.4% 11.0% -10.2% 3.0% 5.5% 4.8% 4.7%
Health Care 19.7% 13.1% 8.9% -22.6% 1.8% 3.9% 4.3% 4.5%
Snacks and Pet Care 1.6% 3.5% -29.4% -2.8% 0.7% -0.7% 3.3% 3.0%
Household Care GBU
Fabric Care and Home Care 19.8% 13.5% 10.5% -2.2% 2.7% 3.7% 4.5% 4.1%
Baby Care and Family Care 2.7% 6.3% 9.2% 1.5% 4.5% 2.2% 4.0% 5.0%
Total Business Segments 19.7% 12.4% 7.4% -6.2% 2.9% 3.5% 4.5% 4.5%
Corporate -16.7% 41.0% 46.9% -6.1% 1.8% -7.5% 10.2% 2.9%
Total Company 20.2% 12.1% 6.9% -6.2% 2.9% 3.7% 4.4% 4.5%
Beauty
Volume w/ Acquisitions/Divestitures 4% 2% -2% 3% 5% 5% 4%
Volume w/o Acquisitions/Divestitures 4% 3% -2% 4% 5% 5% 4%
Foreign Exchange 3% 6% -4% 0% 0% 0% 0%
Price -1% 0% 2% 1% 1% 1% 2%
Mix/Other 1% 1% 0% -1% -1% -1% -1%
Net Sales Growth 4.9% 7.2% 9.1% -3.0% 3.0% 4.0% 4.8% 4.8%
Organic Sales Growth 4% 4% 0% 4% 4% 5% 5%
Grooming
Foreign Exchange 4% 7% -6% 0% -1% 0% 0%
Price 2% 2% 4% 4% 1% 2% 2%
Mix/Other 3% -3% -2% -2% 0% -1% -1%
Net Sales Growth 51040.0% 45.4% 11.0% -10.2% 3.0% 5.5% 4.8% 4.7%
Organic Sales Growth 7% 5% -3% 3% 6% 5% 5%
Health Care
Foreign Exchange 2% 5% -5% 0% -1% 0% 0%
Price 2% 1% 3% 1% -1% 1% 1%
Mix/Other 1% -1% -2% -2% 0% -1% -1%
Net Sales Growth 19.7% 13.1% 8.9% -22.6% 1.8% 3.9% 4.3% 4.5%
Organic Sales Growth 8% 4% -2% 2% 5% 4% 5%
Snacks and Pet Care
Volume w/ Acquisitions/Divestitures 0% 3% -6% -2% 2% 3% 3%
Volume w/o Acquisitions/Divestitures 0% 3% -6% -2% -1% 3% 3%
Foreign Exchange 2% 4% -4% 1% 0% 0% 0%
Price 1% 1% 9% 3% -1% 1% 2%
Mix/Other 1% -1% -2% -1% -1% -1% -1%
Net Sales Growth 1.6% 3.5% -29.4% -2.8% 0.7% -0.7% 3.3% 3.0%
Organic Sales Growth 2% 3% 1% 0% -3% 3% 3%
Household Care GBU
Fabric Care and Home Care
Foreign Exchange 3% 5% -5% -1% -1% 0% 0%
Price 0% 1% 6% -1% -1% 1% 1%
Mix/Other 0% -1% 0% -1% -2% -1% -1%
Net Sales Growth 19.8% 13.5% 10.5% -2.2% 2.7% 3.7% 4.5% 4.1%
Baby Care and Family Care
Volume w/ Acquisitions/Divestitures 5% 4% 1% 7% 6% 4% 4%
Volume w/o Acquisitions/Divestitures 5% 8% 2% 7% 6% 4% 4%
Price 0% 1% 5% 0% -1% 1% 2%
Mix/Other -1% 0% -1% -2% -1% -1% 0%
Net Sales Growth 2.7% 6.3% 9.2% 1.5% 4.5% 2.2% 4.0% 5.0%
Corporate -16.7% 41.0% 46.9% -6.1% 1.8% -7.5% 10.2% 2.9%
Total Company
Price 1% 1% 5% 1% 0% 1% 1%
Mix/Other 0% -1% -1% -1% -1% -1% -1%
Net Sales Growth 20.2% 12.1% 6.9% -6.2% 2.9% 3.7% 4.4% 4.5%
Percent of Annual Net Sales

Beauty 27.6% 24.2% 23.1% 23.5% 24.3% 24.3% 24.4% 24.5% 24.5%
Grooming 0.0% 7.4% 9.6% 9.9% 9.5% 9.5% 9.7% 9.7% 9.7%
Health Care 17.2% 17.2% 17.3% 17.5% 14.5% 14.3% 14.4% 14.3% 14.3%
Snacks and Pet Care 7.5% 6.4% 5.9% 3.9% 4.0% 3.9% 3.7% 3.7% 3.6%
Household Care GBU
Fabric Care and Home Care 27.4% 27.5% 27.7% 28.5% 29.7% 29.6% 29.7% 29.7% 29.6%
Baby Care and Family Care 20.2% 17.4% 16.4% 16.7% 18.1% 18.4% 18.1% 18.1% 18.1%
Total Business Segments 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Note: Effective 07.01.07, segments restructured to combine Gillette GBU into the Beauty and Household Care GBUs
Note: 2008 and 2009 results restated to reflect Folgers as discontinued operations as Folgers was sold in Q209. Highlighted percent
change data may not be accurate given restatements.
Note: Effective 09.01.09, the Company implemented changes to the organization structure of the Beauty GBU. Results prior to FY 2009
do not reflect these changes.
Note: 2009 results restated to reflect the global pharmaceuticals business as discontinued operations as the business was sold in Q210.
Highlighted percent change data may not be accurate given restatements.
28
Segment Margin
Updated: 01.19.11
Wells Fargo Securities, LLC
Annual Segment Earnings Before Taxes
Segment EBT 2005 2006 2007 2008 2009 FY10 FY11E FY12E FY13E
Beauty $3,051 $3,262 $3,440 $3,528 $3,558 $3,648 $4,008 $4,287 $4,545
Grooming 4 1,176 1,895 2,299 1,900 2,007 2,202 2,334 2,489
Health Care 2,132 2,785 3,365 3,746 2,786 2,809 2,854 3,059 3,246
Snacks and Pet Care 714 627 759 409 388 499 418 442 470
Household Care GBU
Fabric Care and Home Care 3,186 3,905 4,650 5,060 4,663 5,076 5,161 5,539 5,889
Baby Care and Family Care 1,924 2,071 2,291 2,700 2,827 3,270 3,265 3,448 3,690
Total Business Segments 11,011 13,826 16,400 17,742 16,122 17,309 17,907 19,108 20,328
Corporate (1,030) (1,413) (1,690) (2,110) (1,709) (2,262) (1,584) (1,848) (2,200)
Total Company $9,981 $12,413 $14,710 $15,632 $14,413 $15,047 $16,323 $17,261 $18,128
Segment EBT Margin

Beauty 19.2% 19.5% 19.2% 18.1% 18.8% 18.7% 19.8% 20.2% 20.4%
Grooming 40.0% 23.0% 25.5% 27.9% 25.6% 26.3% 27.4% 27.7% 28.2%
Health Care 21.6% 23.5% 25.1% 25.7% 24.7% 24.4% 23.9% 24.6% 24.9%
Household Care GBU
Corporate 125.6% 206.9% 175.5% 149.1% 128.6% 167.2% 126.5% 133.9% 154.9%
Total Company 17.6% 18.2% 19.2% 19.1% 18.8% 19.1% 19.9% 20.2% 20.3%
Percent of Annual EBT

Beauty 27.7% 23.6% 21.0% 19.9% 22.1% 21.1% 22.4% 22.4% 22.4%
Grooming 0.0% 8.5% 11.6% 13.0% 11.8% 11.6% 12.3% 12.2% 12.2%
Health Care 19.4% 20.1% 20.5% 21.1% 17.3% 16.2% 15.9% 16.0% 16.0%
Household Care GBU

Note: Effective 07.01.07, segments restructured to combine Gillette GBU into the Beauty and Household Care GBUs
Note: Effective 09.01.09, the Company implemented changes to the organization structure of the Beauty GBU. Results prior to
FY 2009 do not reflect these changes.
Note: 2009 results restated to reflect the global pharmaceuticals business as discontinued operations as the business was sold
in Q210
29
30
Income Statement
Updated: 01.19.11
Wells Fargo Securities, LLC Annual Income Statement
% % % %
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Change 2011E Change 2012E Change 2013E Change
Net Sales $39,375 $40,169 $43,373 $51,407 $56,741 $68,222 $76,476 $81,748 $76,694 $78,938 2.9 $81,873 3.7 $85,446 4.4 $89,321 4.5
Provision for Restructuring - Net Sales (131) 69 4 0 0 0 0 0 0 0 0 0 0
Cost of Products Sold (20,966) (20,481) (21,760) (25,143) (27,872) (33,125) (36,686) (39,536) (38,690) (37,919) -2.0 (39,542) 4.3 (41,055) 3.8 (42,694) 4.0
Provision for Restructuring - COPS (1,136) (508) (381) 0 0 0 0 0 0 0 0 0 0
Gross Margin 17,142 19,249 21,236 26,264 28,869 35,097 39,790 42,212 38,004 41,019 7.9 42,331 3.2 44,391 4.9 46,627 5.0
Selling, General and Administrative Expense (11,588) (12,052) (13,009) (16,882) (18,400) (21,848) (24,340) (25,575) (22,630) (24,719) 9.2 (25,227) 2.1 (26,359) 4.5 (27,625) 4.8
Provision for Restructuring - MR&A (583) (519) (374) 0 0 0 0 0 0 0 0 0 0
Operating Profit 4,971 6,678 7,853 9,382 10,469 13,249 15,450 16,637 15,374 16,300 6.0 17,104 4.9 18,032 5.4 19,002 5.4
Interest Expense (794) (603) (561) (629) (834) (1,119) (1,304) (1,467) (1,358) (946) -30.3 (831) -12.2 (859) 3.4 (974) 13.3
Other Non-Operating Income, Net 674 308 238 152 346 283 564 462 397 (28) -107.1 49 -275.0 88 79.6 100 13.6
Earnings Before Income Taxes 4,851 6,383 7,530 8,905 9,981 12,413 14,710 15,632 14,413 15,326 6.3 16,323 6.5 17,261 5.7 18,128 5.0
Income Taxes (2,086) (2,283) (2,557) (2,749) (3,058) (3,729) (4,370) (4,293) (3,733) (3,949) 5.8 (4,441) 12.5 (4,697) 5.8 (4,931) 5.0
Provision for Restructuring - Income Taxes 375 252 213 0 0 0 0 0 0 0 0 0 0
Net Earnings from Discontinued Operations 0 0 0 0 0 0 0 277 2,756 1,790 0 0 0
Net Earnings $3,140 $4,352 $5,186 $6,156 $6,923 $8,684 $10,340 $11,616 $13,436 $13,167 -2.0 $11,881 -9.8 $12,564 5.7 $13,197 5.0
Preferred Dividend Impact on Funding of ESOP (15) (12) (9) (4) (1) 0 0 0 0 0 0 0 0
Diluted Net Earnings $3,125 $4,340 $5,177 $6,152 $6,922 $8,684 $10,340 $11,616 $13,436 $13,167 -2.0 $11,881 -9.8 $12,564 5.7 $13,197 5.0
EPS - Diluted $1.11 $1.54 $1.85 $2.20 $2.53 $2.64 $3.04 $3.42 $3.39 $3.67 8.4 $3.98 8.5 $4.39 10.3 $4.85 10.4
Core EPS - Diluted $1.64 $1.80 $2.04 $2.20 $2.53 $2.64 $3.04 $3.42 $3.39 $3.67 8.4 $3.98 8.5 $4.39 10.3 $4.85 10.4
Household and Personal Care Products
Dividends $0.70 $0.76 $0.82 $0.93 $1.03 $1.15 $1.28 $1.45 $1.64 $1.80 9.9 $1.97 9.1 $2.12 7.9 $2.28 7.5
EBITDA 7,242 8,371 9,556 11,115 12,353 15,876 18,580 19,803 18,456 19,408 5.2 20,060 3.4 21,047 4.9 22,077 4.9
EBITDA/Share - Diluted $2.58 $2.98 $3.41 $3.97 $4.51 $4.83 $5.47 $5.97 $5.85 $6.26 7.0 $6.73 7.4 $7.36 9.4 $8.11 10.2
Core EBITDA 9,092 9,329 10,307 11,115 12,353 15,876 18,580 19,803 18,456 19,408 5.2 20,060 3.4 21,047 4.9 22,077 4.9
Core EBITDA/Share - Diluted $3.23 $3.32 $3.68 $3.97 $4.51 $4.83 $5.47 $5.97 $5.85 $6.26 7.0 $6.73 7.4 $7.36 9.4 $8.11 10.2
Avg. Shares Outstanding - Basic 2,601 2,595 2,593 2,580 2,516 3,055 3,159 3,081 2,952 2,901 -1.7 2,787 -3.9 2,673 -4.1 2,543 -4.8
Avg. Shares Outstanding - Diluted 2,811 2,810 2,803 2,799 2,737 3,286 3,399 3,317 3,154 3,099 -1.7 2,982 -3.8 2,860 -4.1 2,721 -4.8
Cost of Products Sold (%) 53.25 50.99 50.17 48.91 49.12 48.55 47.97 48.36 50.45 48.04 48.30 48.05 47.80
Selling, General and Administrative Expense (%) 29.43 30.00 29.99 32.84 32.43 32.02 31.83 31.29 29.51 31.31 30.81 30.85 30.93
Interest Expense (%) 2.02 1.50 1.29 1.22 1.47 1.64 1.71 1.79 1.77 1.20 1.01 1.01 1.09
Effective Tax Rate (%) 31.13 31.10 30.88 30.87 30.64 30.04 29.71 27.47 25.90 25.77 27.21 27.21 27.20
Gross Margin (%) 46.75 49.01 49.83 51.09 50.88 51.45 52.03 51.64 49.55 51.96 51.70 51.95 52.20
Operating Margin (%) 17.32 19.01 19.84 18.25 18.45 19.42 20.20 20.35 20.05 20.65 20.89 21.10 21.27
EBITDA Margin (%) 23.09 23.22 23.76 21.62 21.77 23.27 24.30 24.22 24.06 24.59 24.50 24.63 24.72
Pretax Margin (%) 17.02 18.28 19.09 17.32 17.59 18.20 19.23 19.12 18.79 19.42 19.94 20.20 20.30
Net Margin (%) 11.68 12.56 13.18 11.97 12.20 12.73 13.52 13.87 13.93 14.41 14.51 14.70 14.77
Return on Sales (Net Income/Sales) x 11.68% 12.56% 13.18% 11.97% 12.20% 12.73% 13.52% 13.87% 13.93% 14.41% 14.51% 14.70% 14.77%
Asset Turnover (Sales/Avg. Assets) = 1.15x 1.07x 1.03x 1.02x 0.96x 0.69x 0.56x 0.58x 0.55x 0.60x 0.62x 0.64x 0.67x
Return on Avg. Assets (%) x 13.38% 13.43% 13.53% 12.21% 11.68% 8.81% 7.56% 8.04% 7.66% 8.65% 9.03% 9.36% 9.92%
Financial Leverage (Avg. Assets/Avg. Equity) = 2.83x 2.92x 2.83x 2.93x 3.23x 2.42x 2.11x 2.07x 2.09x 2.11x 2.10x 2.14x 2.19x
Return on Avg. Equity (%) 37.86% 39.24% 38.24% 35.79% 37.76% 21.34% 15.95% 16.61% 16.04% 18.23% 18.97% 20.03% 21.73%
Return on Avg. Invested Capital (%) 19.34% 19.98% 20.34% 18.84% 17.75% 12.89% 10.69% 11.57% 11.02% 12.63% 13.24% 13.71% 14.76%

EQUITY RESEARCH DEPARTMENT
Balance Sheet
Updated: 01.19.11
Wells Fargo Securities, LLC Annual Balance Sheet
% % % %
Cash and Cash Equivalents $2,306 $3,427 $5,428 $4,232 $6,389 $6,693 $5,354 $3,313 $4,781 $2,879 -39.8 $5,353 85.9 $4,160 -22.3 $3,308 -20.5
Investment Securities 212 196 784 1,660 1,744 1,133 0 0 0 0 0 0 0
Accounts Receivable 2,931 3,090 3,038 4,062 4,185 5,725 6,629 6,761 5,836 5,335 -8.6 5,647 5.8 5,901 4.5 6,171 4.6
Inventories 3,384 3,456 3,640 4,400 5,006 6,291 6,819 8,416 6,880 6,384 -7.2 6,911 8.3 7,222 4.5 7,553 4.6
Deferred Income Taxes 397 521 843 958 1,081 1,611 1,727 2,012 1,209 990 -18.1 968 -2.2 968 0.0 968 0.0
Prepaid Expenses and Other Current Assets 1,659 1,476 1,487 1,803 1,924 2,876 3,502 4,013 3,199 3,194 -0.2 3,381 5.8 3,533 4.5 3,694 4.6
Total Current Assets $10,889 $12,166 $15,220 $17,115 $20,329 $24,329 $24,031 $24,515 $21,905 $18,782 -14.3 $22,260 18.5 $21,783 -2.1 $21,694 -0.4
Prop., Plant, and Equip., Net 13,095 13,349 13,104 14,108 14,332 18,770 19,540 20,640 19,462 19,244 -1.1 20,330 5.6 20,605 1.4 21,000 1.9
Goodwill and Other Intangible Assets 8,300 13,430 13,507 23,900 24,163 89,027 90,178 94,000 89,118 85,648 -3.9 86,890 1.5 84,738 -2.5 82,640 -2.5
Other Non-Current Assets 2,103 1,831 1,875 1,925 2,703 3,569 4,265 4,837 4,348 4,498 3.4 5,442 21.0 6,348 16.6 7,163 12.8
Total Assets $34,387 $40,776 $43,706 $57,048 $61,527 $135,695 $138,014 $143,992 $134,833 $128,172 -4.9 $134,923 5.3 $133,474 -1.1 $132,496 -0.7
Accounts Payable $2,075 $2,205 $2,795 $3,617 $3,802 $4,910 $5,710 $6,775 $5,980 $7,251 21.3 $7,675 5.8 $8,020 4.5 $8,387 4.6
Accrued and Other Liabilities 5,538 6,768 7,391 10,243 9,796 12,947 12,968 11,099 8,601 8,559 -0.5 9,060 5.8 9,466 4.5 9,900 4.6
Debt Due Within One Year 2,233 3,731 2,172 8,287 11,441 2,128 12,039 13,084 16,320 8,472 -48.1 11,512 35.9 11,512 0.0 11,512 0.0
Total Current Liabilities $9,846 $12,704 $12,358 $22,147 $25,039 $19,985 $30,717 $30,958 $30,901 $24,282 -21.4 $28,247 16.3 $28,998 2.7 $29,799 2.8
Long-Term Debt 9,792 11,201 11,475 12,554 12,887 35,976 23,375 23,581 20,652 21,360 3.4 21,464 0.5 21,464 0.0 21,464 0.0
Deferred Income Taxes 894 1,077 1,396 1,349 1,896 12,354 12,015 11,805 10,752 10,902 1.4 10,709 -1.8 10,709 0.0 10,709 0.0
Other Non-Current Liabilities 1,845 2,088 2,291 2,808 3,230 4,472 5,147 7,864 9,146 10,189 11.4 10,678 4.8 10,678 0.0 10,678 0.0
Total Liabilities $22,377 $27,070 $27,520 $38,858 $43,052 $72,787 $71,254 $74,208 $71,451 $66,733 -6.6 $71,098 6.5 $71,849 1.1 $72,650 1.1
Shareholders' Equity 12,010 13,706 16,186 18,190 18,475 62,908 66,760 69,784 63,382 61,439 -3.1 63,825 3.9 61,625 -3.4 59,846 -2.9
Tot. Liab. & Shr. Equity $34,387 $40,776 $43,706 $57,048 $61,527 $135,695 $138,014 $143,992 $134,833 $128,172 -4.9 $134,923 5.3 $133,474 -1.1 $132,496 -0.7
Inventory Analysis
Materials and Supplies $1,096 $1,031 $1,095 $1,191 $1,424 $1,537 $1,590 $2,262 $1,557 $1,692 8.7
Work in Process $373 $323 $291 $340 $350 $623 $444 $765 $672 $604 -10.1
Finished Products $1,915 $2,102 $2,254 $2,869 $3,232 $4,131 $4,785 $5,389 $4,651 $4,088 -12.1
Book Value/Share $4.27 $4.88 $5.78 $6.50 $6.75 $19.14 $19.64 $21.04 $20.10 $19.82 -1.4 $21.40 8.0 $21.55 0.7 $21.99 2.1
Tangible Book Value/Share $1.32 $0.10 $0.96 ($2.04) ($2.08) ($7.95) ($6.89) ($7.30) ($8.16) ($7.81) -4.3 ($7.73) -1.0 ($8.08) 4.5 ($8.38) 3.6
Percent of Sales:
Accounts Receivable 7.4% 7.7% 7.0% 7.9% 7.4% 8.4% 8.7% 8.3% 7.6% 6.8% 6.9% 6.9% 6.9%
Inventories 8.6% 8.6% 8.4% 8.6% 8.8% 9.2% 8.9% 10.3% 9.0% 8.1% 8.4% 8.5% 8.5%
Prepaid Expenses and Other Current Assets 4.2% 3.7% 3.4% 3.5% 3.4% 4.2% 4.6% 4.9% 4.2% 4.0% 4.1% 4.1% 4.1%
Accounts Payable 5.3% 5.5% 6.4% 7.0% 6.7% 7.2% 7.5% 8.3% 7.8% 9.2% 9.4% 9.4% 9.4%
Accrued and Other Liabilities 14.1% 16.8% 17.0% 19.9% 17.3% 19.0% 17.0% 13.6% 11.2% 10.8% 11.1% 11.1% 11.1%
Liquidity/Solvency:
Current Ratio 1.11 0.96 1.23 0.77 0.81 1.22 0.78 0.79 0.71 0.77 0.79 0.75 0.73
Quick Ratio 0.76 0.69 0.94 0.57 0.61 0.90 0.56 0.52 0.49 0.51 0.54 0.50 0.47
Cash Collection Cycle 49.43 50.30 43.72 38.39 40.57 42.54 42.62 44.82 39.47 25.14 17.86 18.24 18.23
Interest Coverage TTM 11.45 15.47 18.37 17.67 14.81 14.19 14.25 13.50 13.59 20.52 24.15 24.50 22.67
Total Debt/TTM EBITDA 1.32 1.60 1.32 1.88 1.97 2.40 1.91 1.85 2.00 1.54 1.64 1.57 1.49
Leverage:
LT Debt/Total Capital 40.7% 39.1% 38.5% 32.2% 30.1% 35.6% 22.9% 22.2% 20.6% 23.4% 22.2% 22.7% 23.1%
Total Debt/Total Capital 50.0% 52.1% 45.7% 53.4% 56.8% 37.7% 34.7% 34.4% 36.8% 32.7% 34.1% 34.9% 35.5%
Asset Efficiency:
Receivables Turnover 13.48 13.34 14.16 14.48 13.76 13.77 12.38 12.21 12.18 14.13 14.91 14.80 14.80
Inventory Turnover 6.10 5.99 6.13 6.25 5.93 5.86 5.60 5.19 5.06 5.72 5.95 5.81 5.78
A/P Turnover 9.74 9.60 8.78 8.08 7.68 7.90 7.01 6.59 5.83 5.66 5.37 5.27 5.24
Avg. Days Receivables 27.07 27.36 25.78 25.21 26.53 26.51 29.48 29.89 29.98 25.83 24.48 24.66 24.66
Avg. Days Inventory 59.84 60.95 59.51 58.36 61.59 62.24 65.22 70.33 72.15 63.84 61.36 62.82 63.15
Avg. Days Payables 37.48 38.00 41.58 45.18 47.54 46.21 52.08 55.39 62.65 64.52 67.98 69.24 69.59
Finished Products/Total Inventory 56.6% 60.8% 61.9% 65.2% 64.6% 65.7% 70.2% 64.0% 67.6% 64.0%
31
32
Cash Flow Statement
Updated: 01.19.11
Wells Fargo Securities, LLC Annual Cash Flow Statement
% % % %
Net Earnings $3,140 $4,352 $5,186 $6,156 $6,923 $8,684 $10,340 $11,616 $13,436 $13,167 -2.0 $11,881 -9.8 $12,564 5.7 $13,197 5.0
Depreciation and Amortization 2,271 1,693 1,703 1,733 1,884 2,627 3,130 3,166 3,082 3,108 0.8 2,956 -4.9 3,015 2.0 3,075 2.0
Share-Based Compensation Expense 0 0 559 491 524 585 668 555 516 453 -12.2 452 -0.3 465 3.0 479 3.0
Deferred Income Taxes (102) 389 (67) 342 564 (112) 253 1,214 596 36 48 0 0
Gain on Sale of Businesses 0 0 0 0 0 (75) (153) (284) (2,377) (2,670) 2 0 0
Change in Working Capital 669 841 1,220 406 (1,329) (344) (1,547) (1,591) (364) 2,213 270 36 38
Other (174) 467 101 227 113 7 719 332 30 (235) (133) 0 0
Operating Cash Flow $5,804 $7,742 $8,702 $9,355 $8,679 $11,372 $13,410 $15,008 $14,919 $16,072 7.7 $15,476 -3.7 $16,080 3.9 $16,790 4.4
Capital Expenditures (2,486) (1,679) (1,482) (2,024) (2,181) (2,667) (2,945) (3,046) (3,238) (3,067) -5.3 (3,239) 5.6 (3,290) 1.6 (3,470) 5.5
Proceeds from Asset Sales 788 227 143 230 517 882 281 928 1,087 3,068 14 0 0
Acquisitions, Net of Cash Acquired (138) (5,471) (61) (7,476) (572) 171 (492) (381) (368) (425) (398) 0 0
Change in Investments (7) (433) 37 (874) (100) 884 673 (50) 166 (173) (25) 0 0
Investing Cash Flow ($1,843) ($7,356) ($1,363) ($10,144) ($2,336) ($730) ($2,483) ($2,549) ($2,353) ($597) -74.6 ($3,648) 511.1 ($3,290) -9.8 ($3,470) 5.5
Dividends to Shareholders (1,943) (2,095) (2,246) (2,539) (2,731) (3,703) (4,209) (4,655) (5,044) (5,458) 8.2 (5,536) 1.4 (5,664) 2.3 (5,796) 2.3
Change in Short-Term Debt (1,092) 1,394 (2,052) 4,911 2,016 (8,624) 9,006 2,650 (2,420) (1,798) 2,412 0 0
Change in Long-Term Debt 1,130 1,229 170 775 1,095 17,263 (13,171) (4,659) 2,339 (4,716) (17) 0 0
Treasury Stock Purchases (1,250) (568) (1,236) (4,070) (5,026) (16,830) (5,578) (10,047) (6,370) (6,004) -5.7 (7,073) 17.8 (9,100) 28.7 (9,180) 0.9
Impact of Stock Options and Other 141 237 267 562 521 1,319 1,499 1,867 681 721 5.9 758 5.1 781 3.0 804 3.0
Household and Personal Care Products
Financing Cash Flow ($3,014) $197 ($5,097) ($361) ($4,125) ($10,575) ($12,453) ($14,844) ($10,814) ($17,255) 59.6 ($9,455) -45.2 ($13,983) 47.9 ($14,172) 1.4
Effect of Exchange Rates (56) 17 387 (46) (61) 237 187 344 (284) (122) 101 0 0
Net Change in Cash & Equivalents $891 $600 $2,629 ($1,196) $2,157 $304 ($1,339) ($2,041) $1,468 ($1,902) -229.6 $2,474 -230.1 ($1,193) -148.2 ($852) -28.6
Cash & Equiv. Beg. $1,415 $2,199 $2,799 $5,428 $4,232 $6,389 $6,693 $5,354 $3,313 $4,781 44.3 $2,879 -39.8 $5,353 85.9 $4,160 -22.3
Cash & Equiv. End $2,306 $2,799 $5,428 $4,232 $6,389 $6,693 $5,354 $3,313 $4,781 $2,879 -39.8 $5,353 85.9 $4,160 -22.3 $3,308 -20.5
Avg. Shares Outstanding - Diluted 2,811 2,810 2,803 2,799 2,737 3,286 3,399 3,317 3,154 3,099 -1.7 2,982 -3.8 2,860 -4.1 2,721 -4.8
Operating Cash Flow/Shr. - Diluted $2.06 $2.76 $3.10 $3.34 $3.17 $3.46 $3.95 $4.52 $4.73 $5.19 9.6 $5.19 0.1 $5.62 8.4 $6.17 9.7
Free Cash Flow $3,318 $6,063 $7,220 $7,331 $6,498 $8,705 $10,465 $11,962 $11,681 $13,005 11.3 $12,237 -5.9 $12,790 4.5 $13,320 4.1
Free Cash Flow/Shr. - Diluted $1.18 $2.16 $2.58 $2.62 $2.37 $2.65 $3.08 $3.61 $3.70 $4.20 13.3 $4.10 -2.2 $4.47 9.0 $4.89 9.4
Free Cash Flow Productivity 105.7% 139.3% 139.2% 119.1% 93.9% 100.2% 101.2% 103.0% 86.9% 98.8% 103.0% 101.8% 100.9%
Percent of Sales:
Capital Expenditures 6.3% 4.2% 3.4% 3.9% 3.8% 3.9% 3.9% 3.7% 4.2% 3.9% 4.0% 3.9% 3.9%
Free Cash Flow 8.4% 15.1% 16.6% 14.3% 11.5% 12.8% 13.7% 14.6% 15.2% 16.5% 14.9% 15.0% 14.9%

One Year Forward Valuation History
Relative EV/EBITDA
Year Price Range Per Share P/E Range (X) P/E Range (X) Range (X) FCF Yield (%) Yield Range (%)
(Dec) High Low Earnings EBITDA FCF Dividends High Low High Low High Low High Low High Low
1991 $11.92 $9.50 18.21 14.51 0.99 1.07 4.18% 3.33% 2.83% 2.25%
1992 $13.94 $11.28 $0.65 $1.40 $0.40 $0.27 19.74 15.98 1.18 1.08 10.42 8.66 6.00% 4.85% 2.59% 2.10%
1993 $14.72 $11.31 $0.71 $1.50 $0.68 $0.29 18.39 14.14 1.22 1.04 9.45 7.47 4.91% 3.77% 2.92% 2.24%
1994 $16.16 $12.81 $0.80 $1.72 $0.56 $0.33 17.02 13.50 1.33 1.17 8.99 7.29 3.00% 2.38% 2.93% 2.32%
1995 $22.38 $15.16 $0.95 $1.95 $0.38 $0.38 20.85 14.13 1.38 1.27 11.09 7.75 8.00% 5.42% 2.80% 1.90%
1996 $27.75 $19.84 $1.07 $2.17 $1.21 $0.43 22.80 16.30 1.35 1.23 11.57 8.39 4.66% 3.34% 2.41% 1.72%
1997 $41.72 $25.91 $1.22 $2.52 $0.93 $0.48 30.89 19.18 1.39 1.17 16.18 10.34 3.20% 1.99% 2.07% 1.29%
1998 $47.41 $32.56 $1.35 $2.75 $0.83 $0.54 31.35 21.54 1.28 1.20 15.39 10.81 2.04% 1.40% 1.86% 1.28%
1999 $57.81 $41.00 $1.51 $3.28 $0.66 $0.61 37.63 26.69 1.44 1.25 20.45 14.89 2.25% 1.60% 1.63% 1.16%
2000 $59.19 $26.38 $1.54 $3.07 $0.92 $0.67 35.08 15.63 1.02 0.56 19.49 9.35 6.51% 2.90% 2.77% 1.23%
2001 $40.86 $27.98 $1.69 $3.27 $1.72 $0.73 21.18 14.50 0.74 0.74 12.83 9.21 9.23% 6.32% 2.82% 1.93%
2002 $47.38 $37.04 $1.93 $3.55 $2.58 $0.79 22.20 17.35 1.05 1.25 13.27 10.57 6.42% 5.02% 2.34% 1.83%
2003 $49.97 $39.79 $2.13 $3.85 $2.38 $0.87 20.86 16.61 1.26 1.41 13.04 10.62 6.54% 5.21% 2.46% 1.96%
2004 $57.40 $48.89 $2.40 $4.25 $2.60 $0.98 22.16 18.88 1.39 1.36 12.80 11.08 5.08% 4.33% 2.23% 1.90%
2005 $59.70 $51.16 $2.59 $4.70 $2.48 $1.09 21.23 18.19 1.47 1.41 11.42 10.02 5.19% 4.45% 2.37% 2.03%
2006 $64.73 $52.75 $2.81 $5.14 $2.66 $1.21 19.96 16.27 1.19 1.14 13.31 11.15 6.86% 5.59% 2.58% 2.10%
2007 $75.18 $60.42 $3.24 $5.67 $3.62 $1.36 21.90 17.60 0.91 0.84 14.72 12.15 5.23% 4.20% 2.57% 2.06%
2008 $74.26 $54.92 $3.43 $5.97 $3.16 $1.55 20.62 15.25 0.85 1.25 14.28 11.04 8.23% 6.09% 3.13% 2.32%
2009 $63.48 $43.93 $3.60 $6.24 $4.52 $1.72 17.07 11.81 1.26 1.48 11.62 8.46 8.91% 6.16% 4.29% 2.97%
2010 $65.38 $58.92 $3.72 $6.31 $3.91 $1.89 15.60 14.05 1.15 1.29 11.11 10.15 7.19% 6.48% 3.47% 3.12%
Average '91-'10 (exc'l '97-'00) 19.99 15.57 1.17 1.19 11.99 9.60 6.23% 4.81% 2.80% 2.17%
Average '01-'10 20.28 16.05 1.12 1.22 12.84 10.45 6.89% 5.38% 2.82% 2.22%
2011E $65.94 $63.40 $4.19 $7.04 $4.24 $2.04

2012E $65.94 $63.40 $4.61 $7.72 $4.64 $2.20
Valuation on '12 Ests. $70.00 15.19x 10.87x 6.64% 3.14%

Valuation on '12 Ests. $73.00 15.84x 11.28x 6.36% 3.01%
Note: Per share figures are adjusted to display calendar-year results

Note: Earnings and EBITDA per share exclude discontinued operations, one-time items, and restructuring charges
Note: Results restated beginning in 2008 for Folgers divestiture and in 2009 for global pharmeceuticals divestiture
Note: Relative P/E is to the S&P 500
Note: 2011 and 2012 high/low prices are 2011 YTD
Relative to Historical Average Range

% of implied '12 low -8.4% 52.9% 128.8%
% of implied '12 high 6.3% 70.0% 109.6%
33
Appendix – Commodity Charts
Fuel
Natural Gas (NYM $/btu) Low Sulfur No 2 Diesel Fuel (Gulf Coast $/gal)
$14 $5
Quarter Average
Quarter Average
$12 Q409: $4.927 Q410: $3.978
Q409: $1.947 Q410: $2.337
Q309: $3.441 Q310: $4.235 $4
Q309: $1.757 Q310: $2.030
$10 Q209: $3.811 Q210: $4.353
Q209: $1.534 Q210: $2.098
Q109: $4.469 Q110: $4.999
Q109: $1.293 Q110: $2.043
$3
$8
$6
$2
$4
$1
$2
$0 $0
Jan-06
Apr-06
Jul-06
Jan-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Source: FactSet and Wells Fargo Securities, LLC Source: FactSet and Wells Fargo Securities, LLC
Jet Fuel Kerosene (Gulf Coast $/gal)

$5
Quarter Average
Q409: $1.969 Q410: $2.344
$4 Q309: $1.781 Q310: $2.072
Q209: $1.555 Q210: $2.122
Q109: $1.331 Q110: $2.054
$3
$2
$1
$0
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Resins
High Density Polyethylene (North America $/lb) Linear Low Density Polyethylene (North America $/lb)
$1.10 $1.10
Quarter Average Quarter Average
Q409: $0.72 Q410: $0.84 Q309: $0.64 Q310: $0.73
$1.00 $1.00
Q309: $0.69 Q310: $0.78 Q209: $0.60 Q210: $0.79
Q209: $0.65 Q210: $0.84 Q109: $0.57 Q110: $0.78
$0.90 Q109: $0.60 Q110: $0.83 $0.90 Q408: $0.63 Q409: $0.67
$0.80 $0.80
$0.70 $0.70
$0.60 $0.60
$0.50 $0.50
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Oct-10
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Source: C MAI and Wells Fargo Securities, LLC Source: C MAI and Wells Fargo Securities, LLC
Note: Represents Blow Molding North American Delivered contract Note: Represents Butene, Film North American Delivered contract
Low Density Polyethylene (North America $/lb) PET (North America $/lb)
$1.10 $1.10
Q409: $0.75 Q410: $0.93 Q409: $0.75 Q410: $0.87
$1.00 $1.00
Q309: $0.72 Q310: $0.87 Q309: $0.77 Q310: $0.77
Q209: $0.68 Q210: $0.89 Q209: $0.73 Q210: $0.81
$0.90 Q109: $0.65 Q110: $0.86 $0.90 Q109: $0.67 Q110: $0.80
$0.80 $0.80
$0.70 $0.70
$0.60 $0.60
$0.50 $0.50
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Note: Represents GP, Film North American Delivered contract Note: Represents Small/Large Buyer North American Delivered contract
Polypropylene (North America $/lb) Polystyrene (North America $/lb)

$1.40 $1.60
Q409: $0.75 Q410: $0.84 Q409: $0.97 Q410: $0.92
$1.20 Q309: $0.73 Q310: $0.83 $1.40 Q309: $0.96 Q310: $0.87
Q209: $0.59 Q210: $0.90 Q209: $0.84 Q210: $1.05
Q109: $0.52 Q110: $0.88 Q109: $0.77 Q110: $1.11
$1.00 $1.20
$0.80 $1.00
$0.60 $0.80
$0.40 $0.60
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Note: Represents GP Homopolymer North American Delivered contract Note: Represents General Purpose North American Delivered contract
34
Pulp & Packaging
Northern Bleached Softwood Kraft Pulp Index (FOEX PIX $/ton) Bleached Hardwood Kraft Pulp Index (FOEX PIX $/ton)
$1,100 $1,050
Quarter Average
Quarter Average
Q409: $670 Q410: $865
$1,000 Q409: $773.7 Q410: $957.2 $950 Q309: $551 Q310: $891
Q309: $682.7 Q310: $960.3
Q209: $492 Q210: $870
Q209: $605.5 Q210: $946.5
$900 $850 Q109: $534 Q110: $750
Q109: $603.1 Q110: $849.6
$800 $750
$700 $650
$600 $550
$500 $450
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Source: Bloomberg and Wells Fargo Securities, LLC Source: Bloomberg and Wells Fargo Securities, LLC
Paperboard Index (BLS PPI Index)

$270
Quarter Average
Q409: 198.6 Q410: 233.7
$250 Q309: 202.4 Q310: 235.5
Q209: 206.7 Q210: 225.0
Q109: 220.9 Q110: 207.0
$230
$210
$190
$170
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Source: Bureau of Labor Statistics and Wells Fargo Securities, LLC
Agricultural Commodities
Soybean Oil (Cen ILL $/lb) Crude Palm Oil (FOB Malaysia $/lb)
$0.80 $0.80
$0.70 Q409: $0.36 Q410: $0.48 $0.70 Q409: $0.31 Q410: $0.48
Q309: $0.32 Q310: $0.37 Q309: $0.29 Q310: $0.38
$0.60 $0.60
Q209: $0.35 Q210: $0.36 Q209: $0.33 Q210: $0.35
$0.50 Q109: $0.30 Q110: $0.35 $0.50 Q109: $0.24 Q110: $0.35
$0.40 $0.40
$0.30 $0.30
$0.20 $0.20
$0.10 $0.10
$0.00 $0.00
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Source: FactSet and Wells Fargo Securities, LLC Source: Bloomberg and Wells Fargo Securities, LLC
Crude Coconut Oil (FOB Philippines $/lb) Tallow USDA Steer Offal Byproduct Packer Bleachable ($/lb)
$1.00 $0.60
Q409: $0.31 Q410: $0.69 Q409: $0.25 Q410: $0.38
$0.50
$0.80 Q309: $0.30 Q310: $0.50 Q309: $0.28 Q310: $0.31
Q209: $0.33 Q210: $0.41 Q209: $0.24 Q210: $0.32
Q109: $0.29 Q110: $0.36 $0.40 Q109: $0.18 Q110: $0.28
$0.60
$0.30
$0.40
$0.20
$0.20
$0.10
$0.00 $0.00
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Source: FactSet and Wells Fargo Securities, LLC Source: Bloomberg and Wells Fargo Securities, LLC
35
Specialty Chemicals
Phosphates Index (BLS PPI Index) Sodium Carbonate and Sulfate Index (BLS PPI Index)
$600 $220
Q409: 162.6 Q410: 241.1 $200 Q409: 169.7 Q410: 158.3
$500
Q309: 155.2 Q310: 220.8 Q309: 173.0 Q310: 161.2
Q209: 201.0 Q210: 223.2 Q209: 179.3 Q210: 159.6
$180
Q109: 262.7 Q110: 201.3 Q109: 177.2 Q110: 165.0
$400
$160
$300
$140
$200
$120
$100 $100
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Source: Bureau of Labor Statistics and Wells Fargo Securities, LLC Source: Bureau of Labor Statistics and Wells Fargo Securities, LLC
Metals
Copper (LME $/t) Nickel (LME $/t)

$12,000 Quarter Average $60,000
Quarter Average
Q409: $6,645 Q410: $8,660
Q409: $17,572 Q410: $23,615
$10,000 Q309: $5,856 Q310: $7,249 $50,000 Q309: $17,664 Q310: $21,205
Q209: $4,664 Q210: $7,036
Q209: $12,907 Q210: $22,503
Q109: $3,440 Q110: $7,242
$8,000 $40,000 Q109: $10,461 Q110: $20,091
$6,000 $30,000
$4,000 $20,000
$2,000 $10,000
$0 $0
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Zinc (LME $/t)

$5,000
Quarter Average
Q409: $2,215 Q410: $2,317
$4,000 Q309: $1,759 Q310: $2,015
Q209: $1,472 Q210: $2,029
Q109: $1,175 Q110: $2,286
$3,000
$2,000
$1,000
$0
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Appendix – Foreign Exchange
U.S. Dollars per Euro U.S. Dollars per Canadian Dollar

$1.750 $1.200 0 1. 12 . 11: $1.0147
0 1. 12 . 11: $1.3062
$1.650 Qua r t e r A v e r a ge
Qua r t e r A v e r a ge
$1.100 Q409: $0.947 Q410: $0.987
Q409: $1.476 Q410: $1.359
Q309: $0.911 Q210: $0.962
$1.550 Q309: $1.430 Q310: $1.292
Q209: $0.858 Q210: $0.973
Q209: $1.363 Q210: $1.274
$1.000 Q109: $0.803 Q110: $0.961
Q109: $1.305 Q110: $1.383
$1.450
$0.900
$1.350
$0.800
$1.250
$1.150 $0.700
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Dec-09
Dec-08
Oct-09
Feb-10
Apr-10
Jun-10
Aug-10
Dec-10
Oct-10
Feb-09
Apr-09
Jun-09
Aug-09
Dec-09
Oct-09
Feb-10
Apr-10
Jun-10
Aug-10
Dec-10
Oct-10
36
U.S. Dollars per Japanese Yen U.S. Dollars per British Pound
$0.0140 0 1. 12 . 11: $0.0120 $1.950
0 1. 12 . 11: $1.5698
Qu a r t e r A v e r a g e $1.850
$0.0130 Q409: $0.0111 Q410: $0.0121
Qua r t e r A v e r a g e
Q409: $1.633 Q410: $1.581
Q309: $0.0107 Q310: $0.0117
Q209: $0.0103 Q210: $0.0109 $1.750 Q309: $1.640 Q310: $1.551
$0.0120 Q109: $0.0107 Q110: $0.0110

Q209: $1.551 Q210: $1.491
Q109: $1.437 Q110: $1.559
$1.650
$0.0110
$1.550
$0.0100 $1.450
$0.0090 $1.350
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
U.S. Dollars per Mexican Peso U.S. Dollars per Chinese Yuan Renminbi
$0.110 $0.1520 0 1. 12 . 11: $0.1514
0 1. 12 . 11: $0.0829
Qu a r t e r A v e r a g e
$0.100 Qua r t e r A v e r a g e
$0.1500 Q409: $0.1465 Q410: $0.1502
Q409: $0.077 Q410: $0.081
Q309: $0.1464 Q310: $0.1477
Q309: $0.075 Q310: $0.078
Q209: $0.1464 Q210: $0.1465
$0.090 Q209: $0.075 Q210: $0.080
$0.1480 Q109: $0.1463 Q110: $0.1465
Q109: $0.070 Q110: $0.078
$0.080 $0.1460
$0.070 $0.1440
$0.060 $0.1420
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
37
Required Disclosures
Procter & Gamble Co. (PG) 3-yr. Price Performance

$83.00
$81.00
$79.00
$77.00
$75.00
$73.00
$71.00
$69.00
$67.00
$65.00
$63.00
$61.00
$59.00
$57.00
Security Price
$55.00
$53.00
$51.00
$49.00
$47.00
$45.00
$43.00
$41.00
$39.00
1/14/08
2/11/08
3/10/08
4/7/08
5/5/08
6/2/08
6/30/08
8/25/08
9/22/08
10/20/08
11/17/08
1/12/09
2/9/09
4/6/09
5/4/09
6/1/09
6/29/09
8/24/09
9/21/09
10/19/09
11/16/09
1/11/10
2/8/10
4/5/10
5/3/10
5/31/10
6/28/10
7/26/10
8/23/10
10/18/10
11/15/10
12/13/10
1/10/11
7/28/08
12/15/08
3/9/09
7/27/09
12/14/09
3/8/10
9/20/10
Date
Date Publication Price ($) Rating Code Val. Rng. Low Val. Rng. High Close Price ($)
1/14/2008 Gere
1/14/2008 NA 1 77.00 79.00 70.29
z 1/31/2008 65.52 1 75.00 77.00 65.42
z 8/6/2008 67.97 1 73.00 75.00 67.77
z 9/3/2008 71.03 1 75.00 77.00 71.42
z 10/27/2008 58.87 1 63.00 65.00 57.37
z 10/29/2008 60.99 1 65.00 68.00 60.99
z 11/11/2008 64.45 1 68.00 70.00 63.82
z 12/11/2008 58.58 1 67.00 69.00 58.58
2/2/2009 Hausner
2/2/2009 53.05 SR NE NE 53.05
Source: Wells Fargo Securities, LLC estimates and Reuters data
Symbol Key Rating Code Key

d Rating Downgrade Initiation, Resumption, Drop or Suspend 1 Outperform/Buy SR Suspended
c Rating Upgrade Analyst Change 2 Market Perform/Hold NR Not Rated
z Valuation Range Change Split Adjustment 3 Underperform/Sell NE No Estimate
Additional Information Available Upon Request
I certify that:
1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or
issuers discussed; and
2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed
by me in this research report.
Wells Fargo Securities, LLC maintains a market in the common stock of Procter & Gamble Co.
Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Procter & Gamble Co.
PG: Risks to our range include (1) prolonged global economic downturn, (2) foreign exchange fluctuations, (3) an increase in taxes
on international profits, (4) aggressive competitive discounting, (5) loss of a major customer (Wal-Mart, Target), (6) significant
input cost inflation, (7) integration risk/dilution related to future acquisitions, and (8) European antitrust issues.
Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions.
Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability
and revenue of the firm, which includes, but is not limited to investment banking revenue.
38
STOCK RATING
1=Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the
next 12 months. BUY
2=Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market
over the next 12 months. HOLD
3=Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12
months. SELL
SECTOR RATING
O=Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months.
M=Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months.
U=Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months.
VOLATILITY RATING
V = A stock is defined as volatile if the stock price has fluctuated by +/-20% or greater in at least 8 of the past 24 months or if the
analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading.
As of: January 20, 2011

44% of companies covered by Wells Fargo Securities, LLC Wells Fargo Securities, LLC has provided investment banking
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39
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(212) 214-5070 / (704) 715-8437
Sam J. Pearlstein diane.schumaker@wachovia.com Todd M. Wickwire
Co-Head of Equity Research (212) 214-5054 Co-Head of Equity Research (410) 625-6393
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CONSUMER HEALTH CARE REAL ESTATE, GAMING & LODGING

Food Biotechnology Gaming
Eric Serotta, CFA (212) 214-8035 Brian Abrahams, M.D. (212) 214-8060 Carlo Santarelli (212) 214-5029
Dennis Geiger (212) 214-5028 Matthew J. Andrews (617) 603-4218 Kelly Knybel (212) 214-8065
Homebuilding/Building Products Healthcare Facilities Healthcare/Manufactured Housing & Self Storage
Carl Reichardt (415) 396-3054 Gary Lieberman, CFA (212) 214-8013 Todd Stender (212) 214-8067
Adam Rudiger, CFA (415) 396-3194 Ryan Halsted (212) 214-8022 Philip DeFelice, CFA (443) 263-6442
Leisure Managed Care Lodging/Multifamily & Retail
Timothy Conder, CPA (314) 955-5743 Peter Costa (617) 603-4222 Jeffrey J. Donnelly, CFA (617) 603-4262
Joe Lachky (314) 955-2061 Medical Technology Dori Kesten (617) 603-4233
Michael Walsh, CFA, CPA (314) 955-6277 Larry Biegelsen (212) 214-8015 Robert LaQuaglia, CFA, CMT (617) 603-4263
Restaurants Narendra Nayak (212) 214-8038 Office/Industrial & Infrastructure
Jeffrey F. Omohundro, CFA (804) 697-7354 Lei Huang (212) 214-8039 Brendan Maiorana, CFA (443) 263-6516
Katie H. Willett (804) 697-7356 Brian Kennedy (212) 214-8027 Young Ku, CFA (443) 263-6564
Jason Belcher (804) 697-7352 Pharma Services
Retail Hardlines Greg T. Bolan (615) 525-2418
Matt Nemer (415) 396-3938 Tim Evans (615) 525-2426
Trisha Dill, CFA (312)-920-3594 Pharmaceuticals
Specialty Retailing Michael K. Tong, CFA, PhD (212) 214-8020
Evren Kopelman, CFA (212) 214-8024 Brian E. Jeep (212) 214-8069
Maren Kasper (212) 214-5016 David Gu (212) 214-8057
TECHNOLOGY & SERVICES

Data Networking & Wireline Equipment
Jess Lubert, CFA (212) 214-5013
ENERGY Michael Kerlan (212) 214-8052
Alternative Energy Information Technology (IT) Services
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Gord0n Douthat (303) 863-6920 Aerospace & Defense
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Trevor Seelye (303) 863-6880 Sam J. Pearlstein (212) 214-5054
Gary S. Liebowitz, CFA (212) 214-5055 Semiconductors/Computer Hardware
Michael A. Hall, CFA (303) 863-6894 David Wong, CFA, PhD (212) 214-5007
Michael D. Conlon (212) 214-5056
Midstream Energy/Master Limited Partnerships Amit Chanda (314) 955-3326
Automotive/Industrial and Electrical Products
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Eric Shiu (212) 214-5038 Priya Parasuraman (617) 603-4269
Praneeth Satish (212) 214-8056 Diversified Industrials
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Hays Mabry (212) 214-8021 Jason Maynard (310) 597-4081
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Karen Russillo (415) 396-3505
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Neil Kalton, CFA (314) 955-5239 Michael Webber, CFA (212) 214-8019
Daniel Moisio (314) 955-0646
Sarah Akers, CFA (314) 955-6209 Ross Briggs (212) 214-8040
Jonathan Reeder (314) 955-2462 Transportation
Oilfield Services and Drilling Anthony P. Gallo, CFA (410) 625-6319
Matthew D. Conlan, CFA (212) 214-5044 Michael Busche (443) 263-6579
Christopher W. Wicklund (212) 214-8028
Tom Curran, CFA (212) 214-5048
EQUITY STRATEGY
FINANCIAL SERVICES Equity Strategy
Gina Martin Adams, CFA, CMT (212) 214-8043
Insurance Howard Park (212) 214-8063
John Hall (212) 214-8032 MEDIA & TELECOMMUNICATIONS
Sean R. Dargan (212) 214-8023 Broadcasting & Cable
Vincent Caintic, CFA (212) 214-8034 Marci Ryvicker, CFA, CPA (212) 214-5010
Elyse Greenspan, CFA (212) 214-8031 Timothy Schlock, CFA, CPA (212) 214-5011
Susan Ross (212) 214-8030 Stephen Bisson (212) 214-8033
Specialty Finance Interactive Entertainment
James P. Shanahan (314) 955-1026 Jess Lubert, CFA (212) 214-5013
Christopher Harris, CFA (443) 263-6513 Michael Kerlan (212) 214-8052
Nathan Burk, CFA (314) 955-2083 Telecommunication Services - Wireless/Wireline
U.S. Banks Jennifer M. Fritzsche (312) 920-3548 RETAIL RESEARCH MARKETING
Matt Burnell (212) 214-5030 Gray Powell, CFA (212) 214-8048 Retail Research Marketing
Herman Chan (212) 214-8037 Andrew Spinola (212) 214-5012 Colleen Hansen (410) 625-6378
January 14, 2011

Wells Fargo ICL March 2011

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Wells Fargo ICL March 2011

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January 20, 2011

Please see page 38 for rating definitions, important disclosures

Investment Thesis And Valuation

Key Growth Drivers

Source: Company reports and Wells Fargo Securities, LLC estimates

Feb Pampers Underjams Household Care Western Europe X

Mar Crest 3D White Health & Well-Being North America X

Mar Naturella Health & Well-Being Greater China X

Mid-Jul Charmin Improvements Household Care U.S. and Canada X

Jul Charmin Basic Household Care Canada X

Mid-Sep Gucci Guilty for Women Beauty & Grooming Global X

Oct Gillette Guard Beauty & Grooming India X X

Dec Pampers Dry Max Household Care Expanded to 50 Countries X

Geographic White-Space Expansion

Colgate-Palmolive Co. 76.2%

Exhibit 5. Procter & Gamble Historical Geographic Sales

Percent of Net Sales

Source: Company reports and Wells Fargo Securities, LLC

Colgate-Palmolive Co. ~45.0%

Source: Company reports

Developing And Emerging Market Growth

Growing Markets Growth Opportunities

U.S. UK Germany Mexico C hina Indonesia Sub- India

India Indonesia China Brazil U.S. Germany

Household & Personal Care Industry

Ongoing Cost Initiatives

2009 Infusium Sold the Infusium brand Beauty & Grooming

Procter & Gamble -- Business Overview

Hard Surface Sprays Mr. Clean** Ace*

Snacks & Pet Care Snacks Snacks Snacks Pringles*

Exhibit 11. - continued

Fragrances Burberry Bruno Banani

Hair Care Appliances

Household Care $200 20% #1

Household Care GBU

Seasonality of EBT: Avg. 2007-2010

Source: Company reports and Wells Fargo Securities, LLC estimates

Advertising And R&D

Source: Company reports and Wells Fargo Securities, LLC estimates

Procter & Gamble Co.

Procter & Gamble Co.

Annual Segment Net Sales

Percent of Annual Net Sales

Source: Company reports and Wells Fargo Securities, LLC estimates

Annual Segment Earnings Before Taxes

Segment EBT Margin

Percent of Annual EBT

Source: Company reports and Wells Fargo Securities, LLC estimates

Source: Company reports and Wells Fargo Securities, LLC estimates

Source: Company reports and Wells Fargo Securities, LLC estimates

Source: Company reports and Wells Fargo Securities, LLC estimates

2011E $65.94 $63.40 $4.19 $7.04 $4.24 $2.04

Valuation on '12 Ests. $70.00 15.19x 10.87x 6.64% 3.14%

Note: Per share figures are adjusted to display calendar-year results

Relative to Historical Average Range

Source: Company reports and Wells Fargo Securities, LLC estimates

Appendix – Commodity Charts

Jet Fuel Kerosene (Gulf Coast $/gal)

Polypropylene (North America $/lb) Polystyrene (North America $/lb)

Pulp & Packaging

Paperboard Index (BLS PPI Index)

Copper (LME $/t) Nickel (LME $/t)

Zinc (LME $/t)

Appendix – Commodity Charts

Appendix – Foreign Exchange