Lafley Tells Shareholders That 'P&G is Designe...(do a billion dollars or more in ann...),Health

annual sales with P&G has jumped from two to seven.

* $43 billion in net earnings and $50 billion in free cash flow has been

generated.

* P&G's market capitalization increased to more than $200 billion, making

P&G the seventh most valuable company in the United States and the 13th

most valuable in the world.

Meeting The Future Growth Challenge

"Every year, the growth challenge becomes more demanding, and the year ahead is no exception," said Lafley. "But, I'm confident that we'll continue to grow at or ahead of our long-term goals because we have made choices that create opportunities for growth." Lafley discussed the choices that are driving P&G's growth:

* A balanced portfolio that is considerably stronger and better balanced

today, consisting of 22 product categories with a mix of fast-growing

and strong cash-generating businesses.

* A sharper focus on and smarter investment in the company's five core

strengths: consumer understanding, branding, innovation, go-to-market

capability and scale. For example, in the area of innovation, P&G has

increased its success rate on new innovations by 40 percentage points in

the past five years, and the innovation pipeline has delivered 6 percent

organic sales growth since the beginning of the decade. In the area of

consumer research, P&G has invested more than a billion dollars since

the beginning of the decade, involving more than four million consumers

per year.

* Strategic, financial and operational discipline. An example is the

integration of Gillette. P&G added more than 50,000 new product codes,

100,000 new shipping points and nearly 30,000 employees into its systems

with the acquisition of Gillette. The integration teams virtually

completed their work one year ahead of schedule.

* The most diver
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