Linking Opportunity with Responsibility
Sustainability Report – Executive Summary

2004

P&G 2004 Sustainability Report
Executive Summary

CEO Statement

Earning Your Trust
Fair dealing and doing what’s right for the long term arefundamental at P&G. It’s how P&G people have done business forgenerations. It’s at the heart of the trust our Company and ourbrands have earned – and must continue to earn every day,everywhere – from consumers, business partners, and thecommunities in which P&G people live and work. It is the essenceof P&G’s integrity and leadership.
Preserving and strengthening P&G’s reputation is every employee’s
job. It starts with business performance: We must deliver reliable,consistent growth. We met this challenge in fiscal 2004 withresults that culminated in increasingly strong performance over the
past three years. Since July 2001, P&G cumulative sales havegrown 30 percent, and they exceeded $50 billion for the first time
ever, this past year. Earnings per share have grown more than
40 percent cumulatively in the past three years, and theCompany’s cumulative Total Shareholder Return has increased
more than 80 percent since July 2001.
These are solid results, but we know that consistent financial
performance is only one part of our responsibility as a company. It
is necessary but not sufficient. To continuously earn trust, we mustgrow with integrity, and we must lead in ways that fulfill our
Purpose of improving consumers’ everyday lives.
Growing with integrity requires ethical business conduct
everywhere we do business. This can be a demanding challenge inan organization of 110,000 people in nearly 80 countries. One
important way we respond to this challenge is by clarifying theCompany’s expectations for how we operate through ourWorldwide Business Conduct Manual, which we have updated
and are redeploying this year to reflect changes in our own
organization and in the world around us. It includes clear

principles, standards, examples, and resources to guide behavior
everywhere we operate. We consider it imperative that every
employee understand that P&G will not tolerate illegal or unethicalbehavior. While we value and expect business results, we place
equal value on how we achieve those results.
We also strive to earn the trust of shareholders, business partners,
and other stakeholders by fulfilling our Purpose. In the letter that
follows from George Carpenter, Director of P&G Corporate
Sustainable Development, you’ll learn of the most recent steps
we’ve taken to improve consumers’ everyday lives – now and forgenerations to come.
P&G is committed to fulfilling its responsibility to all our
stakeholders. And P&G people are dedicated to making P&G a
company of great results and – equally important – of great values
and character.

A. G. Lafley
Chairman of the Board,
President, and Chief Executive

P&G 2004 Sustainability Report
Executive Summary

Visionmodel in Pakistan, a social model in Haiti, and an emergency relief
model implemented most recently in Ethiopia.
• In May, we launched PUR in the Sindh province of Pakistan using
P&G’s commercial distribution infrastructure. We augmented thiswith more than 1,400 educators and a broad alliance of global
and local partners to help people understand the importance ofsafe drinking water to the health of their families.
• In Haiti, we’re working with PSI, a nonprofit NGO, to reach into
areas where economic and infrastructure constraints limit ourability to pursue a commercial model. This is a great example ofreaching new consumers and new markets, and we plan toexpand this model in the coming year with new partnerships in
sub-Saharan Africa.
Creating Corporate Social Opportunity
We have just completed a year of tremendous progress toward
our vision that P&G can link business opportunity with corporate
responsibility to create a concept we call “corporate social
opportunity.” We believe that we can build our businesses while
contributing our part to help address some of the toughest global
health and social issues.

• We are working with UNICEF, AmeriCares, the International
Rescue Committee, CARE, and other global relief groups toprovide the product to people who need safe drinking water
because of natural disasters and conflict situations. Through ourpartners, we have provided more than 30 million liters of safe
drinking water this past year to help in some of the world’s
worst disasters, including the Bam earthquake in Iran and thedevastating floods in Haiti and the Dominican Republic.

In last year’s Sustainability Report, I identified three key challenges
that P&G faces as we work toward this vision:
1. To create new businesses with sufficient scale to fund researchand development and market-development costs.
2. To develop new business models appropriate to lower-income,developing-country markets.
3. To lower costs to make products affordable in undeveloped
markets that lack large-scale supply chain and distribution
efficiencies that are normal in richer, developed markets.

Third, the low cost of the product – about the price of an egg inmany poor countries – and our partnerships with governments
and NGOs, are creating ways to make this product affordable inundeveloped countries not benefiting from economies of scale or
distribution channels that penetrate rural markets. The social
model described above that is being used in Haiti and Africa is an
example of this.

P&G’s safe drinking water work is a good example of the progress
we’re making in all three areas. We’ve chosen this as a key focus
area based on the United Nations Millennium Development Goalof providing improved access to safe drinking water.

We are only starting to turn our vision into reality. But imagine aworld where corporations, in partnerships with civil society andgovernment, can significantly deliver on the UN Millennium
Development Goal of addressing the world’s most critical healthissues. This improvement in society will provide the foundation forsustainable growth.

First, this is a new business opportunity for P&G, with the potential
scale to reach millions of people who today do not have access tosafe water. It is based on a simple and affordable technology
developed in collaboration with the U.S. Centers for Disease
Control and Prevention (CDC). The product has been shown in
health trials conducted by the CDC to reduce diarrheal illness by
up to 50 percent. The product is called PUR Purifier of Water andtreats even heavily contaminated drinking water so it meetsWorld Health Organization (WHO) standards.
Second, we are developing new business models based on
effective public-private partnerships. P&G has joined with USAID,
Johns Hopkins University, Population Services International (PSI),
and CARE to form the Safe Drinking Water Alliance. This is a
$5 million effort to learn how to best provide P&G’s safe drinking
water technology, using three different models: a commercial

In June, we were honored to receive a World Business Award insupport of the UN Millennium Development Goals, from theInternational Chamber of Commerce, the UN Development
Program, and the International Business Leaders Forum for oursafe drinking water program. This is motivation to continue on ourjourney to bring corporate social opportunity to life.

George D. Carpenter
Director
Corporate Sustainable Development

Visit http://www.pg.com/sr for the full report.

Visit http://www.pg.com/sr for the full report.

P&G 2004 Sustainability Report
Executive Summary

P&G Profile
For 166 years, P&G has been providing trusted, high-quality brands
that make every day better for the world’s consumers. The
Company markets nearly 300 products (Global Key Brands arelisted below) in more than 160 countries around the world.
P&G’s worldwide headquarters is located in Cincinnati, Ohio,
U.S.A. The Company has on-the-ground operations in almost
80 countries worldwide and employs nearly 110,000 people.
P&G is a publicly owned company. Its stock is listed and traded on
the following exchanges: New York, Amsterdam, Paris, Basle,
Geneva, Lausanne, Zurich, Frankfurt, and Brussels.
As of July 30, 2004, there were approximately 1,426,000 common
stock shareholders, including shareholders of record, participants in
the Shareholder Investment Program, participants in P&G stock
ownership plans, and beneficial owners with accounts at banks
and brokerage firms.

This is the sixth Sustainability Report for P&G’s worldwide
operations. Data in this report covers the period from July 1, 2003,
through June 30, 2004. Last year’s report covers the July 1, 2002,
through June 30, 2003, time period. Financial information is given in
U.S. dollars.
As part of P&G’s initiative to optimize resources to fit a growing
global business and to accelerate innovation and growth, theCompany operates its business through Global Business Units (GBUs).
• Fabric and Home Care
• Beauty Care
• Baby and Family Care
• Health Care
• Snacks and Beverages

Global Key Brands
Of P&G’s almost 300 brands around the world, these are the ones we consider our key brands.
Global Business Unit
Fabric and Home Care

Product Lines
Laundry detergent, fabricconditioners, dish care,household cleaners, fabricrefreshers, bleach, and carefor special fabrics

Key Brands
Tide, Ariel, Downy, Lenor, Dawn, Fairy, Joy, Gain, Ace Laundry
and Bleach, Swiffer, Dash, Bold, Cascade, Mr. Clean/Proper,
Febreze, Bounce, Cheer, Era, Bonux, Dreft, Daz, Flash, Vizir, Salvo,
Viakal, Maestro Limpio, Rindex, Myth, Alomatik

Beauty Care

Hair care/hair color, skin careand cleansing, cosmetics,
fragrances, andantiperspirants/deodorants

Pantene, Olay, Head & Shoulders, Clairol’s Herbal Essences,
Nice ‘n Easy, Natural Instincts and Hydrience, Cover Girl, SK-II,
Max Factor, Hugo Boss, Safeguard, Rejoice, Secret, Old Spice, Zest,
Vidal Sassoon, Pert, Ivory, Lacoste, Aussie, Infusium 23, Camay,
Noxzema, Infasil, Joy Parfum, Valentino, Sure, Wash&Go, Wella,
Koleston, Wellaflex, Shockwaves, Rochas, Escada, Gucci
Always, Whisper, Tampax, Lines Feminine Care, Naturella, Evax,
Ausonia, Orkid

Feminine protection pads,
tampons, and pantiliners
Baby diapers, baby and toddler
wipes, baby bibs, baby change
and bed mats
Paper towels, toilet tissue, andfacial tissue

Pampers, Luvs, Kandoo, Dodot

Health Care

Oral care, pet health andnutrition, pharmaceuticals, andpersonal health care

Crest, Iams, Eukanuba, Actonel, Vicks, Asacol, Prilosec OTC,
Metamucil, Fixodent, PUR, Scope, Macrobid, Pepto-Bismol,
Didronel, ThermaCare, Blend-a-med

Snacks and Beverages

Snacks and beverages

Pringles, Folgers, Millstone

Baby and Family Care

Charmin, Bounty, Puffs, Tempo

Building for the Future
William Procter andJames Gamble, Founders,
Candle & Soap Business

1837

1840

$1 Million
Net Sales

1850

1860

Regional
U.S. Markets

1870

P&G 2004 Sustainability Report
Executive Summary

Key Indicators
Key Sustainability Focus Areas
At P&G, we proactively bring together innovative ideas andresources to create new products and services that improve thequality of people’s daily lives around the world, at all income levels.
P&G is particularly well positioned to do this because we are intouch daily with the needs of the world’s consumers.
To bring our sustainability efforts to life, we decided to focus onareas in which we can most effectively make a positive difference
and which can involve all our businesses and regions. After muchinternal and external discussion, we selected two areas:• Water• Health and Hygiene
P&G’s work in these areas entails• Reaching consumers we have never reached, such as in the ruralvillages and urban slums of the developing world.
• Creating new products responding to the needs, frustrations,and aspirations of those new consumers and selling those
products at an affordable price.
• Exploring new business models, often with new supply anddistribution systems to lower cost and extend reach.

Major Opportunities and Impacts
Associated with Products and Services
Environmental Protection• Resource Use• Water• Waste Reduction
Social Responsibility• Health• Hygiene• Education
Economic Development• Shareholder Value• Employment• Taxes, Fees, and Contributions

Manufacturing Resource & Waste Summary by Global Business Unit (GBU)
TotalsAll waste units are in thousands ofmetric tonnes unless otherwise noted.†

Production
Product Shipped
Raw Materials from Recycled Sources
Waste
Generated Waste
Percent Recycled / Reused Waste
Disposed Waste
Solid Waste
Non-Hazardous
Hazardous
Effluents (Excluding Water)
Air Emissions**
Other
Energy Consumption (105 GJ)¶
Greenhouse Gas Emissions** ¶Water Consumption (million cubic meters)
SARA Releases (metric tonnes)***2004 Global Business Unit Detail*

2004

2003

2002

BFC

FHC

BC

HC

SB

18,471
102

17,055
119

16,151
208

4,132
102

10,072
0

1,332
0

1,367
0

1,568
0

817
56%

793
52%

798
54%

428
61%

155
51%

148
53%

42
48%

44
52%

300
21
21
16

317
9
35
24

304
19
23
20

153
1.4
4.0
10.2

52
14.4
7.4
2.8

60
3.8
5.5
0.4

19
1.4
1.0
0.5

16
0
3.0
2.0

731
2,937
79
1,843

758
3,122
86
1,567

706
3,148
85
1,274

470
2,087
54.0
0.12

146
464
14.1
1,345

51
159
5.2
39

32
116
1.8
459

32
111
3.4
0

† 1 metric tonne = 1,000 kg = 2,205 lbs.
* BFC = Baby & Family Care; FHC = Fabric & Home Care; BC = Beauty Care; HC = Health Care; SB = Snacks & Beverages.
** Air emissions include particulates, SO2, NOx, CO, and VOC whereas greenhouse gas emissions include CO2 from fuel combustion sources.
*** Releases defined in the U.S. Superfund Amendments and Reauthorization Act (SARA) by the U.S. Environmental Protection Agency.
¶ Energy use and greenhouse gas emissions have been restated using conversion units recommended by the U.S. Department of Energy in its 1605 reporting initiative.
The major change was in the conversion of electricity from kilowatt hours to gigajoules (GJ). Actual energy use didn’t change. The greenhouse gas emission factors changed slightly.

Incorporated
Company
P&G Brand
Advertising

1880

ProfitSharing

P&G Code ofRegulations

Beginning of P&G
Research & Development

1890

Shortening &Oils Business

1900

1910

CanadaMarket1920

P&G 2004 Sustainability Report
Executive Summary

P&G’s Billion-Dollar Brands

Diversity Data – Global Enrollment
P&G continues to focus on diversity as a global strategy andexpects its workforce to become increasingly more diverse. Global
data on enrollment by gender is shown in the following table:
2004
36.7
36.9

Global Enrollment % Female

Management
All Other Employees1

2003
35.5
37.1

2002
34.6
41.6

1 The category of “All Other Employees” continues to be an evolving global database as
more of P&G’s plants are included.

The percentages of minority and female employees in the UnitedStates are shown in the following table:
Financial Highlights
Amounts in millions
except per-share amounts

Net Sales
Selling, General, andAdministrative Expenses
Income Taxes
Net Earnings
Basic Net Earnings
Per Common Share1
Total Assets
Long-Term Debt
Shareholders’ Equity

2004$51,4072003$43,377

2002$40,238

16,504
2,869
6,481

13,383
2,344
5,186

12,571
2,031
4,352

2.46
57,04812,554
17,278

1.95
43,706
11,475
16,186

1.63
40,776
11,201
13,706% Minorities
Management
All Other Employees2% FemaleManagement
All Other Employees2

2004

2003

2002

18.8
19.5

18.0
19.8

16.1
20.3

35.4
38.9

34.8
38.7

34.4
38.0

2 Administrative, Technical, and Plant Technicians

Occupational Health & Safety Data
Past three years’ global data on two key metrics for worker healthand safety:

1 Restated for two-for-one stock split effective May 21, 2004.

Total Incident Rate
Injury and illness per 100 employees

Philanthropic Contributions
P&G and its employees have a long-standing commitment tobeing good citizens and neighbors in all places where we dobusiness around the world. We believe we have a responsibility touse our resources – money, people, and energy – wisely. We show
our commitment through financial support and volunteerism.
Our historic focus on communities with P&G operations
has grown into a commitment to improving the lives of children
in need.
Global philanthropic contributions made by P&G, The P&G Fund,and Corporate Contributions for the past three years are provided
in the following table:

Total

2004
$103,647,125

2003$84,572,906

2002$77,746,930

2004
0.55

Total

2003
0.54

2002
0.67

2003
0.22

2002
0.27

Total Lost Workday Case Rate
Lost and restricted workday cases per 100 employees

2004
0.21

Total

Summary of Violations and Interventions
The table lists global data on environmental, transportation, andworker health and safety violations over the past three years.
2004
64$28,320

Number
Fines

2003
67
$154,756

2002
45$39,026

The number of fines stayed about the same as last year while theseverity, as measured by fines, fell more than 80 percent.
Transportation-related incidents continue to be a focus area.

Beginning of
P&G Market
Research

0

SafetyPhilippines
Oral Care
Program and UK
Synthetic
Started Markets
Detergents Business

1930

1940

Tide
Introduced
Overseas
Division

1950$1 Billion
Net Sales

Disposable
First Fluoride Diapers
Toothpaste
Business

1960

P&G 2004 Sustainability Report
Executive Summary

Sustainability in Action
New Tide Economizes on Rinse Water
An innovative new Tide product in the Philippines is saving waterin households that rinse laundry manually. Instead of having torinse soapy clothes three or four times, consumers rinse only once
if they use Tide 1-Banlaw (Tide 1-Rinse, in English).
In the Philippines and other developing countries, consumers often
wash by hand or in semi-automatic machines that don’t rinse.
Doing laundry may require carrying water to the laundry area aswell as repeated wringing. The strenuous physical requirements ofrinsing can cause hand and back pain.
P&G’s Safe Drinking Water Program
One of the UN Millennium Development Goals is to halve theproportion of people without access to or able to afford safe
drinking water by 2015. Today, more than a billion people lackaccess to safe drinking water, so meeting this target is a significant
challenge. It requires that at least 125,000 unserved people beconnected to safe water supplies each day.
An estimated 2 million children each year – 5,000 each day – diebecause of diarrheal diseases, many of which could be prevented
with safe drinking water. Though efforts are underway around theworld to bring safe and sufficient water services to these people,
P&G has a way to bring clean water right now to those not yet
reached. We do this with a new product we invented called PUR
Purifier of Water.
PUR is a low-cost, simple-to-use water treatment system forhousehold use. PUR’s technology and ingredients are based on
those used in municipal water treatment systems in the developed
world. The product is ideal for the developing world because it
costs one U.S. cent to purify a liter of water.

In the Philippines specifically, many households receive only limited
water and only during limited hours. Rinsing three or four times
can get expensive or may not even be possible.
Filipino housewives typically do laundry three to five times a week,with each session lasting two to three hours.
Tide 1-Banlaw dramatically conserves water as well as time andeffort, freeing women to do other things for their families.
Because some consumers try to cut down on rinsing by using lessdetergent than necessary, their wash often comes out dingy. With
Tide 1-Banlaw, they’re more likely to use the correct amount ofdetergent, resulting in cleaner wash. The product’s formula also
helps with this by preventing minerals and particulates in the waterfrom depositing on the clothes.
Tide 1-Banlaw uses a new silicone technology. It is being test
marketed in Davao and is expected to be sold throughout thePhilippines and also in other countries where hand rinsing is common.

PUR comes in a sachet that gets mixed with 10 liters of water. Ina few minutes, dirt and other contaminants separate from thewater. The water gets poured through a filter cloth and stands for
20 minutes. This process removes pathogenic bacteria, viruses, andparasites. The result is clean, safe water that meets World HealthOrganization guidelines.
PUR was developed by the Procter & Gamble Health Sciences
Institute in collaboration with the U.S. Centers for Disease Control
and Prevention. In tests in Guatemala, Pakistan, and Kenya, PUR
reduced the incidence of diarrhea by up to 50 percent. In a test in
Bangladesh, PUR reduced the poisonous arsenic from well water
so it met local safety standards.

Tide 1-Banlaw provides a major lifestyle
improvement for Filipinos.

World Environment
Center Award
Affirmative
ActionEnvironmental
Audit Program1970

Toll-Free
Consumer
Hotline$10 Billion
Net Sales

1980

Feminine
Protection
BusinessStatementof Purpose

1990

1st Annual Global
Environment
ReportOpportunity
2000 Award

FutureShares Clairol
Wella
1998– Acquisition Acquisition
2001 2001
2004

2000

P&G 2004 Sustainability Report
Executive Summary

Sustainable development is a very simple idea.
It is about ensuring a better quality of life foreveryone, now and for generations to come.1
P&G’s Statement of Purpose
We will provide branded products and services ofsuperior quality and value that improve the lives of theworld’s consumers.
As a result, consumers will reward us with leadershipsales, profit and value creation, allowing our people,
our shareholders, and the communities inwhich we live and work to prosper.

Consumers

P&G Values
Leadership
Ownership
Integrity
Passion for Winning
Trust
P&G
BrandsP&G
PeopleP&G Brands and P&G People are the foundation of P&G’s
success. P&G People bring the values to life as we focus on
improving the lives of the world’s consumers.
This report was prepared using the Global Reporting Initiative’s(GRI) July 2002 Sustainability Reporting Guidelines. The missionof the GRI is to promote international harmonization in thereporting of relevant and credible corporate economic,
environmental, and social performance information to enhance
responsible decision-making. The GRI pursues this mission througha multistakeholder process of open dialogue and collaboration in
the design and implementation of widely applicable sustainability
reporting guidelines. The GRI has not verified the contents of thisreport, nor does it take a position on the reliability of information
reported herein.

on theWeb

Please visit these Web sites:
For further information about the GRI,
http://www.globalreporting.org
For the latest P&G news and shareholder and career
information, http://www.pg.com
For the full 2004 Sustainability Report,
http://www.pg.com/sr

On the Cover
A mother and child in Haiti drink cleanwater because of P&G’s Safe Drinking
Water Program. Please see theSustainability in Action section for
more details.

1 Definition from U.K. government report from Department for the Environment,

Transport and the Regions – 1998.
Note: Years listed in this report‘s data charts signify the fiscal year ending June 30.
© 2004 The Procter & Gamble Company. All Rights Reserved.
References to trademarked products in this report are to trademarks owned by andregistered to The Procter & Gamble Company.

0013-6468

Principles
We Show Respect for All Individuals
The Interests of the Company and the Individual Are Inseparable
We Are Strategically Focused in Our Work
Innovation Is the Cornerstone of Our Success
We Are Externally Focused
We Value Personal Mastery
We Seek to Be the Best
Mutual Interdependency Is a Way of Life
Global Editor
Cindy Mastin, U.S.A.
Core Report Team Ina Andreasen, Denmark
Angela Vanegas, Venezuela
Lucy Bogaerts, Belgium
Bea Buyle, Belgium
Dionisis Kolokotsas, Belgium
Anne McConnell, Canada
Chris Smith, U.K.
Robin Tollett, U.S.A.
Pam Wright, U.S.A.
Shinobu Yasutake, Japan
Copy Editor
Jan Sherbin, Cincinnati, Ohio, U.S.A.
DesignAndy Ruttle, David Hess – Ruttle Design Group
Cincinnati, Ohio, U.S.A.
The report team thanks all the individuals throughout the world
who contributed information, stories, and data to this report.
Special thanks to Greg Allgood, P&G U.S.A., for the use of his
photography on the cover and throughout the report.
Contact
Cindy Mastin
Corporate Sustainable Development
1 Procter & Gamble Plaza
Cincinnati, Ohio 45202 U.S.A.
E-mail sustainrep.im@pg.com

This report was printed
on recycled paper.