P&G Reports $0.98 EPS, Up 17%, on 9% Sales Growth; Announces Plan to Create Stand-Alone Coff...(ic sales isalso one of the measures used...),Health

The reconciliation of reported sales growth to organic sales in the October-December 2007 quarter:

Baby Care &

Total P&G Beauty Family Care

Net Sales Growth 9% 10% 8%

Less: Foreign Exchange Impact -5% -6% -5%

Less: Acquisition/Divestiture Impact +1% +1% +5%

Organic Sales Growth 5% 5% 8%

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

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

The reconciliation of free cash flow and free cash flow productivity is provided below ($ millions):

Operating Capital Free Cash Net Free Cash Flow

Cash Flow Spending Flow Earnings Productivity

Oct - Dec '07 $4,141 $(644) $3,497 $3,270 107%

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

(Amounts in Millions Except Per Share Amounts)

Consolidated Earnings Information
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