EMBRACING THE FUTURE

Using the power

of innovation to improve

lives, the environment

and shareholder value.

1 9 9 9 S U S T A I N A B I L T Y R E P O R T1 9 9 9 S U S T A I N A B I L I T Y R E P O R T

2

Table of Contents

Part 1. CEO Statement ......................3

Part 2. Key Indicators ........................4

Part 3. Profile of P&G........................6

Part 4. Policies, Organizationand Management Systems ..10

Part 5. Stakeholder Relationships ...20

Part 6. Management Performance .23

Part 7. Operational Performance ...28

Part 8. Product Performance ..........35

Part 9. Sustainability Overview .......40

Statement of Purpose

We will provide products of superior

quality and value that improve the lives

of the world’s consumers. As a result,

consumers will reward us with leader-

ship sales and profit growth, allowing

our people, our shareholders, and the

communities in which we live and work

to prosper.

FRONT COVER: In Zimbabwe, health care workerstrained by the Health Volunteers Overseas programuse Crest toothpaste educational materials toimprove dental hygiene in remote villages.

This report was prepared in accordance with theGlobal Reporting Initiative’s (GRI)’s

Sustainability Reporting Guidelines: Exposure Draftfor Public Comment and Testing, March 1999. Themission of the GRI is to promote internationalharmonization in the reporting of relevant andcredible corporate environmental, social andeconomic performance information to enhanceresponsible decision-making. GRI pursues thismission through a multi-stakeholder process ofopen dialogue and collaboration in the design andimplementation of widely applicable sustainabilityreporting guidelines. GRI has not verified thecontents of this report, nor does it take a positionon the reliability of information reported herein.For further information about GRI, please visit:http://www.globalreporting.org.

This report is available on P&G’s WorldWide Web site: http://www.pg.com/99sr

Please visit P&G’s Corporate Web site:http://www.pg.com for the latest P&Gnews, shareholder, and career information.

3

Sustainable development, or sustainability, in-tegrates economic progress, social development

and environmental concerns with the objective ofensuring a quality of life for future generations atleast as good as today’s. It is becoming an increas-ingly important public policy issue, andalso a significant business opportunity.

Consistent with the Company’s newbusiness structure, Organization 2005, weare looking to the new Global BusinessUnits (GBUs) for leadership on howsustainability will be ref lected in theirbusiness plans. Concurrently, we havereorganized the Company’s CorporateEnvironmental Quality group to encom-pass all aspects of sustainability, and tofocus its leadership on activities best done at acorporate level.

George Carpenter has been appointed Director-Corporate Sustainable Development to lead thisgroup. This reorganization is designed to shiftaccountability for sustainable development to ourGBUs, and better align our efforts with the neworganization design. These moves will build on,and strengthen, our Company’s long-standingcommitment to the environment, while taking amore holistic view that also incorporates the so-cial and economic concerns of our consumers,shareholders and communities.

Over the past several years, academics, governmentsand non-governmental organizations have beenevolving their views of environmental quality to thebroader, more holistic concept of sustainable devel-opment. While some see this as inevitably leadingto restraining consumption, I view it as an oppor-tunity and stimulus to innovate, to improve con-sumers’ lives, while also making positive contribu-tions to environmental quality and society, particu-larly in developing countries.

We already have made progress in this area. Forexample, the global water supply issue has led

Fabric & Home Care to consider new cleaningmethods that use less water, cold water,non-potable water and even salt water. These newcleaning methods not only help meet thesustainability needs of developing countries, but also

can be leveraged for breakthroughs indeveloped countries.

In Food & Beverage, the need for betternutrition for the world’s growing popula-tion, particularly in developing countries,has led to our development of a new nu-trient drink that has been clinically proven,in a Tanzanian study, to improve thegrowth and development of children. Theseinnovations respond to important con-sumer needs, and bring substantial

sustainability benefits.

We need to make further progress. Each GBU mustunderstand how sustainability impacts its business,and identify the implications for innovation andgeographic expansion programs. As part of this, Ihave asked Fabric & Home Care to develop asustainability plan for its GBU which can also serveas a model for other GBUs. Paul Polman, President-Global Fabric Care, will lead this work and collabo-rate with George Carpenter to define resources thatwill be useful to the GBUs as they develop theseplans. Sustainability also will be one of the areaswe explore in our upcoming strategy reviews.

George Carpenter and the new Corporate Sustain-able Development group will focus on defining theCompany’s overall sustainability policy, identifyingemerging sustainability issues, managing corporatereporting and building relations with externalstakeholders. George’s group also will work closelywith other internal resources involved in thesustainability issue.

Durk I. Jager

This is taken from a letter that Durk I. Jager, P&G President and Chief Executive, sent to the Company’sGlobal Business Leadership Council and to employees on sustainable development on July 1, 1999.

Durk I. Jager,President andChief Executive

Part 1. CEO Statement

4

Major Stakeholder Groups• Consumers • Employees• Communities • Shareholders

Major Impacts Associatedwith ProductsEconomic• Shareholder Value• Employment• Taxes, Fees and Contributions

Social• Health• Hygiene• Education

Environmental• Resource Use (Materials and Energy)• Water• Waste and Emissions

Part 2. Key Indicators

Key Sustainability Focus AreasP&G intends to focus its sustainability efforts on Waterand Health & Hygiene. These two areas are applicableacross both the Company’s global business units andthe interlocking drivers of sustainability; economicdevelopment, social equity and environmental pro-tection. The Company’s approach is to increase share-holder value by contributing solutions to problems,needs and concerns associated with these two areas.

While P&G intends to focus on Water and Health& Hygiene, the Company will continue its long tra-dition of:• doing what is right for consumers, employees,

shareholders and communities where it operates.• building sales and profit growth in a socially and

environmentally responsible manner.• increasing diversity within its workforce.• contributing to a more educated population.• maintaining high standards of health, safety and

environmental protection for its products andoperations throughout the world.

Economic DataFinancial Highlights (Millions of dollars except per share amounts)

1998/99 1997/98 1996/97Net Sales $38,125 $37,154 $35,764Net Earnings $ 3,763 $ 3,780 $ 3,415Basic Net Earnings Per Common Share $2.75 $2.74 $2.43Total Assets $32,113 $30,966 $27,544Long-Term Debt $6,231 $ 5,765 $ 4,143Shareholders’ Equity $12,058 $12,236 $12,046Income Taxes $2,075 $ 1,928 $ 1,834Marketing, Research & Administrative Expenses $10,666 $10,035 $ 9,766

5

Occupational Health & Safety DataPast three years’ data on two key metrics for workerhealth and safety follow:Total Incident Rate(injury and illness per 100 employees)

1998/99 1997/98 1996/970.7 0.8 0.9

Total Lost Workday Case Rate(lost & restricted workday cases per 100 employees)

1998/99 1997/98 1996/970.3 0.4 0.4

Summary of Violations andInterventionsPast three years’ data on environmental, transpor-tation, and worker health and safety violations andinterventions follow:

Diversity – U.S. EnrollmentP&G expects its workforce to become even more diverse in the future. This is a global policy and programsare in place for continuous improvement in all regions. The percentages of minority and women employ-ees in the U.S. are shown in the following table:

% Minorities % Women1998/99 1997/98 1996/97 1998/99 1997/98 1996/97

Management 15.0 15.6 15.5 38.4 38.0 37.5Technicians, Laborers, Service Workers 18.1 18.6 18.6 41.7 41.1 40.8 Total 16.9 17.4 17.4 40.4 39.9 39.5

Worldwide P&G Philanthropic Contributions1998/99 1997/98 1996/97

Total $73,245,604 $66,859,204 $60,616,378

1998/99 By Region

NorthAmerica

Europe,Middle East,

Africa1996/971997/98

Total

ProductionPackaged Product ShippedRaw Materials from Recycled SourcesPackaging UsedPackaging Material from Recycled Sources

WasteGenerated WasteRecycled/Reused Waste

Disposed WasteSolid Waste — Non-HazardousSolid Waste — HazardousEffluents (Excluding Water)Air Emissions

OtherEnergy Use (105 GJ)SARA Releases*

Asia

14,019n/a

1,330480

73067%

17573421

8531.6

LatinAmerica

14,436400

1,367455

89556%

324123720

9471.9

1998/99

14,644380

1,375490

86456%

271273120

9671.6

103884

10124

6758%

18511

58n/a

5,040n/a

440171

20970%

361942

219n/a

1,280296

10552

14614%

115231

57n/a

7,286n/a

729243

44364%

1022

2316

6331.6

* Releases defined in the U.S. Superfund Amendments and Reauthorization Act by the U.S. Environmental Protection Agency.

Production, Waste and Energy Data (Thousands of Metric Tons)

Social Data

1998/99 1997/98 1996/97Number 46 54 56Fines $33,250 $73,100 $14,900

6

markets approximately 300 brands of consumer products to nearly 5 billion consumers in over140 countries. The products include laundry detergents, toothpastes, shampoos, feminine hygiene prod-ucts, pharmaceuticals, snacks, diapers, cosmetics, and cold remedies. These products are best known bytheir brand names: Tide, Ariel, Crest, Pantene Pro-V, Always, Whisper, Didronel, Pringles, Pampers, Oilof Olay and Vicks.

P&G’s worldwide headquarters is located in Cincinnati, Ohio, USA. The Company has on the groundoperations in over 70 countries and employs more than 110,000 people worldwide.

P&G is a publicly owned company. Its stock is listed and is traded on the following exchanges: New York,Cincinnati, Amsterdam, Paris, Basle, Geneva, Lausanne, Zurich, Frankfurt, Brussels and Tokyo.

As of July 23, 1999, there were 278,245 Common Stock shareholders of record, including participants inthe Shareholder Investment Program. Five billion shares of Common Stock have been authorized. About1.32 billion shares were outstanding as of June 30, 1999.

This is the first Sustainability report for P&G’s worldwide operations. Data in this report cover the periodfrom July 1, 1998 through June 30, 1999. Financial information is given in U.S. dollars.

Part 3. Profile of P&G

Changes this Fiscal YearIn September, 1998, P&G announced far-reachingchanges to its structure, work processes and cultureto accelerate growth. In June, 1999, the Companyreported on progress toward this initiative calledOrganization 2005. The new organization struc-ture, including the move from four geographic busi-ness units to seven Global Business Units (GBUs)based on product lines, became effective July 1,1999. The GBUs are responsible for all strategic,manufacturing and sourcing activities. Each of the

Key Sustainability FocusAreasP&G intends to focus its sustainabilityefforts on Water and Health & Hygiene.These two areas are applicable across boththe Company’s global business units and

the interlocking drivers of sustainability; economicdevelopment, social equity and environmental pro-tection. The Company’s approach is to increase share-holder value by contributing solutions to problems,needs and concerns associated with these two areas.

While P&G intends to focus on Water and Health& Hygiene, the Company will continue its long tra-dition of:• doing what is right for consumers, employees,

shareholders and communities where it operates.• building sales and profit growth in a socially and

environmentally responsible manner.• increasing diversity within its workforce.• contributing to a more educated population.• maintaining high standards of health, safety and

environmental protection for its products andoperations throughout the world.

Building for the FutureWm. Procter &James Gamble,Founders, Candle& Soap Business

$1 MillionNet Sales

1859Northern U.S.

Markets

1837 1850 1860 1870

7

Financial InformationCore net earnings, which exclude Organization 2005 costs, were $4.15 billion or $3.04 basic net earn-ings per share – an 11% increase over the prior year. Fiscal year 1998/99 net earnings totaled $3.76billion. Basic net earnings per common share of stock were $2.75.

Common share dividends were $1.14 per share in 1999. For the coming year, the annual dividend ratewill increase to $1.28 per common share, marking the forty-fourth consecutive year of increased commonshare dividend payments.

More information on P&G’s financial performance is available on-line at http://www.pg.com/investor.

Financial Highlights (Millions of dollars except per share amounts)

1998-99 1997-98 1996-97Net Sales $38,125 $37,154 $35,764Net Earnings $ 3,763 $ 3,780 $ 3,415Basic Net Earnings Per Common Share $2.75 $2.74 $2.43Total Assets $32,113 $30,966 $27,544Long-Term Debt $6,231 $ 5,765 $ 4,143Shareholders’ Equity $12,058 $12,236 $12,046Income Taxes $2,075 $ 1,928 $ 1,834Marketing, Research & Administrative Expenses $10,666 $10,035 $ 9,766

RegionsFor reporting purposes in 1998/99, P&G dividedthe world into four geographic regions. The NorthAmerica region includes the United States andCanada. The Europe, Middle East and Africa re-gion stretches from the United Kingdom to SouthAfrica, Pakistan to Russia. The Asia region includes

Net Sales by Region (Millions of dollars)Europe,

North Middle East, Latin TotalFiscal Year America Africa Asia America Corporate Worldwide1998/99 $18,977 $11,878 $3,648 $2,825 $797 $38,1251997/98 $18,456 $11,835 $3,453 $2,640 $770 $37,1541996/97 $17,625 $11,587 $3,573 $2,306 $673 $35,764

new GBUs is expected to integrate sustainability inits business plans. Accountability for sustainabledevelopment resides with the GBUs.

The costs resulting from Organization 2005 includethose related to separation and relocation of em-ployees, streamlining manufacturing capabilities,including consolidation and closure of certain manu-facturing facilities, and other charges. Total chargesrelated to Organization 2005 are expected to ap-

proximate $2.6 billion ($1.9 billion after tax) oversix years. The Company recorded charges totaling$481 million ($385 million after tax) for the yearended June 30, 1999.

Acquisitions accounted for as purchases in1998/99 totaled $137 million.

China, India, Japan, Korea, the Philippines, thecountries of South Asia, Australia, and NewZealand. The Latin America region includes Mexicoas well as Central and South America. A small por-tion of sales cannot be accounted for regionally andis reported as Corporate sales.

ProfitSharing

1887

P&GAdvertising

1882

1880 1890 1900 1910

IncorporatedCompany

1890Shortening &Oils Business

P&GCode of

RegulationsCanadaMarkets

Beginningof P&G

Research &Development

1920

8

Business SectorsThroughout f iscal year 1998/99, P&G alsoreported sales according to its business sectors:Laundry & Cleaning, Paper, Beauty Care, Food &Beverage, and Health Care.

Net Sales by Business Sector (Millions of dollars)Laundry & Beauty Food & Health Corporate

Fiscal year Cleaning Paper Care Beverage Care & Other Total1998/99 $11,517 $11,451 $7,115 $4,381 $2,836 $825 $38,1251997/98 $11,099 $10,862 $7,160 $4,376 $2,849 $808 $37,1541996/97 $10,892 $10,101 $7,101 $4,107 $2,895 $668 $35,764

As part of P&G’s Organization 2005 initiative tooptimize resources to fit a growing global businessand to accelerate innovation and growth, theCompany began operating its business alongseven product-based Global Business Units, effec-tive July 1, 1999.

KEY BRANDS

Fabric & Home CareACE BLEACHARIELBOUNCECASCADECHEERDAWNDOWNYFAIRYJOYLENORMR. CLEANTIDE

Feminine ProtectionALWAYSALWAYS ALLDAYSLINES FEM PROTAMPAXWHISPER

Health CareACTONELASACOLBLEND-A-MEDCRESTDIDRONELMACROBIDMETAMUCILNYQUIL/DAYQUILPEPTO-BISMOLSCOPEVICKS FORMULA 44VICKS VAPORUB

Food & BeverageCRISCOFOLGERSJIFMILLSTONEOLEANPRINGLESPUNICASUNNY DELIGHT

Beauty CareCLEARASILCOVER GIRLHEAD & SHOULDERSIVORYMAX FACTOROIL OF OLAYOLD SPICEPANTENE PRO-VPERT PLUSREJOICESAFEGUARDSECRETSK-IIVIDAL SASSOONZEST

Tissue/TowelBOUNTYCHARMINPUFFSTEMPO

Baby CareBABYSANLUVSPAMPERSPAMPERS WIPES

1930 1950

SafetyProgramStarted

Philippinesand U.K.Markets

OverseasDivision

1948

DisposableDiapersBusiness

FirstFluoride

Toothpaste1955

$1 BillionNet Sales

SyntheticDetergents

TideIntroduced

1946

1920 1960Affirmative

Action1965

Building for the Future, continued...

Oral CareBusiness

1940

9

Industry AssociationsP&G is a member of many industry associationswhose activities are directly related to the Company’sbusiness. These associations include the following:

North AmericaAmerican Forest & Paper AssociationAmerican Industrial Health CouncilAmerican Legislative Exchange CouncilAssociation of National AdvertisersBusiness RoundtableChemical Producers/Manufacturers AssociationsConsumer Healthcare Products AssociationCorporations Supporting RecyclingCosmetic Toiletries and Fragrances AssociationsFood Industry/Processors AssociationGlobal Environmental Management InitiativeGrocery Manufacturers AssociationsNational Association of ManufacturersResearch Based Pharmaceutical Companies AssociationsU.S. Council for International Business

Europe, Middle East and AfricaAmerican European Community AssociationCentre for European Policy StudiesChemical Manufacturer AssociationsCosmetic Toiletry and Perfumer AssociationsEfficient Consumer Response AssociationEnvironmental Risk Assessment Steering

& Management CommitteeEuropean American Industrial CouncilEuropean Association of Industries of Branded ProductsEuropean Centre for Ecotoxicity and Toxicology

of Chemicals

European Chemical Industry CouncilEuropean Disposables and Non-Woven AssociationEuropean Industry of Hygiene Paper ProductsEuropean Recovery & Recycling AssociationFood Business ForumFood Industry/Processors AssociationsPaper Industry AssociationsPharmacy Industry AssociationUnion of Industrial & Employer’s FederationsWorld Federation of Advertising

AsiaConfederation of Indian IndustriesCosmetic Toiletries and Fragrance/

Perfume AssociationsIndustry CouncilsPaper Industry Associations

Latin AmericaBusiness Councils for Sustainable DevelopmentCosmetic Toiletry and Fragrance Manufacturers

AssociationsIndustry CouncilsNational Societies of Industry

WorldwideBusiness Industry Advisory CommitteeConference BoardInternational Chamber of CommerceLocal & National Chambers of CommerceNonprescription Drug Manufacturers AssociationsSoap & Detergent AssociationsSolid Waste AssociationsWorld Business Council for Sustainable Development

Contact InformationThis sustainability report is available on P&G’s website: http://www.pg.com/99sr

Other available reports include the 1999Annual Report to Shareholders, 1999 GlobalContributions Report, and the 1998 Environmen-tal Progress Update.

For questions or comments about this report orto request an Executive Summary of this report,write, fax, or e-mail:

Mr. Keith ZookCorporate Sustainable DevelopmentTwo P&G PlazaTN-02 MS-28Cincinnati, OH 45202 USAFax: (513) 983-5226E-mail: sustainrep-im@pg.com

1980 1990 2000

Toll-freeConsumer

Hotline

Opportunity2000

Award1994

FutureShares1998

Organization2005$10 Billion

Net Sales

Juice & FeminineProtectionBusinesses

Statementof

Purpose1987

WorldEnvironmentCenter Award

1992

EnvironmentalAudit

Program

1970

10

Part 4. Policies, Organizationand Management Systems

is guided first and foremost by its Purpose,Values and Principles, subject only to sovereignand international laws. Internationalguidelines, codes, laws and societalexpectations have always provided thefoundation for the policies andmanagement systems employedby the Company.

Statement of Purpose

We will provide products of superior

quality and value that improve the lives

of the world’s consumers. As a result,

consumers will reward us with leader-

ship sales and profit growth, allowing

our people, our shareholders, and the

communities in which we live and work

to prosper.

LawLaw

Organisationfor EconomicCo-operation

and DevelopmentGuidelines

for MultinationalEnterprises

ManagementSystems

International LabourOrganization Tripartite

Declaration

InternationalChamber of

Commerce Ruleson Extortion

& BriberyInternational

Chamberof Commerce

BusinessCharteron S.D.

UniversalDeclarationon Human

Rights

InternationalLabour

OrganizationDeclaration

on FundamentalPrinciples &

Rights at Work

Rio Declaration onSustainable Development Religious

Values& Norms

ImprovedStandardof Living

Transparency

Education

Reporting

Ethics

Statementof Purpose Core

Values

Principles

Policies

Global SullivanPrinciples

GuidelineCodes

SocietalExpectations

InternationalCore Values

GuidelineCodes

SocietalExpectations

InternationalCore Values

11

P&G is its people and the Core Valuesby which they live.

• P&G People We attract and recruit the finest peoplein the world. We build our organization from within,promoting and rewarding people without regard toany difference unrelated to performance. We act onthe conviction that the men and women of Procter &Gamble will always be our most important asset.

• Leadership We are all leaders in our area ofresponsibility, with a deep commitment to deliverleadership results. We have a clear vision of where weare going. We focus our resources to achieve leader-ship objectives and strategies. We develop the

Core Values

PEOPLELEADERSHIP OWNERSHIP

PASSIONFOR

WINNINGINTEGRITY

TRUST

capability to deliver our strategies and eliminateorganizational barriers.

• Ownership We accept personal accountability to meetthe business needs, improve our systems and help oth-ers improve their effectiveness. We all act like owners,treating the Company’s assets as our own and behav-ing with the Company’s long-term success in mind.

• Integrity We always try to do the right thing. Weare honest and straightforward with each other. Weoperate within the letter and spirit of the law. Weuphold the values and principles of P&G in every ac-tion and decision. We are data-based and intellectu-ally honest in advocating proposals, including recog-nizing risks.

• Passion for Winning We are determined to bethe best at doing what matters most. We have ahealthy dissatisfaction with the status quo. Wehave a compelling desire to improve and to win inthe marketplace.

• Trust We respect our P&G colleagues, customers andconsumers and treat them as we want to be treated.We have confidence in each other’s capabilities andintentions. We believe that people work best when thereis a foundation of trust.

PrinciplesThese are the Principles and supporting behaviors whichflow from our Purpose and Core Values.

WE SHOW RESPECT FOR ALL INDIVIDUALSWe believe that all individuals can and want to contrib-

ute to their fullest potential.We value differences.We inspire and enable people to achieve high expecta-

tions, standards, and challenging goals.We are honest with people about their performance.

THE INTERESTS OF THE COMPANY AND THEINDIVIDUAL ARE INSEPARABLEWe believe that doing what’s right for the business with

integrity will lead to mutual success for both the Com-pany and the individual. Our quest for mutual suc-cess ties us together.

We encourage stock ownership and ownership behavior.

WE ARE STRATEGICALLY FOCUSED INOUR WORKWe operate against clearly articulated and aligned objec-

tives and strategies.We only do work and only ask for work that adds value

to the business.We simplify, standardize, and streamline our current work

whenever possible.

INNOVATION IS THE CORNERSTONE OFOUR SUCCESSWe place great value on big, new consumer innovations.

We challenge convention and reinvent the way we dobusiness to better win in the marketplace.

WE ARE EXTERNALLY FOCUSEDWe develop superior understanding of consumers and

their needs.We create and deliver products, packaging and concepts

that build winning brand equities.We develop close, mutually productive relationships with

our customers and our suppliers.We are good corporate citizens.

WE VALUE PERSONAL MASTERYWe believe it is the responsibility of all individuals to

continually develop themselves and others.We encourage and expect outstanding technical mastery

and executional excellence.

WE SEEK TO BE THE BESTWe strive to be the best in all areas of strategic impor-

tance to the Company.We benchmark our performance rigorously versus the very

best internally and externally.We learn from both our successes and our failures.

MUTUAL INTERDEPENDENCY IS A WAYOF LIFEWe work together with confidence and trust across func-

tions, sectors, categories, and geographies.We take pride in results from reapplying others’ ideas.We build superior relationships with all the parties

who contribute to fulfilling our Corporate purpose,including our customers, suppliers, universities,and governments.

12

Business Conduct PoliciesP&G has been built through the character of its people.The character is ref lected in the Company Statement ofPurpose, Core Values and Principles. The following isa brief extract from the P&G Worldwide Business Con-duct Manual.

1. Compliance with Laws and P&G BusinessConduct Policies

P&G is committed to complying with all laws and meet-ing or exceeding regulations wherever we conduct ourbusiness activities.

P&G employees worldwide are expected and directed tocomply with all laws and all P&G business conduct poli-cies relating to their P&G business activities.

Every P&G employee is expected to fully cooperate in theinvestigation of any alleged violation. Concealing a vio-lation or altering or destroying evidence to hinder aninvestigation is not tolerated.

Employees who violate the law may expose themselves aswell as the Company to substantial criminal fines, prisonterms and civil damages.

If an employee believes another P&G employee, consult-ant or contract worker, is violating the law or P&G poli-cies, the employee is expected to bring this informationto the attention of his/her management. If he/she doesnot want to discuss this with his/her management, he/she can talk to (a) Corporate Security, (b) any HumanResources manger or (c) P&G legal counsel.

The “P&G Hot-line” can be used to report illegal behav-ior and enables employees to remain anonymous, if theywish. The Hot-line has been installed in most countrieswhere P&G does business and is operational 24 hours aday.

If employees choose to identify themselves, the Companyhas a strong policy prohibiting intimidation or any re-taliation by any manager or co-worker.

2. Ethical Business Conduct Guidelines

P&G sets high standards for itself regarding its behav-ior and the behavior of its employees when conductingbusiness activities. Integrity and doing the right thinghave long been core P&G values.

Employees should ask themselves the following questionswhen considering any business situation:

Is my action the “right thing to do?”Would my actions withstand public scrutiny?Would my actions protect P&G’s reputation as an ethicalcompany?

If any of the answers are not an unqualified “yes”, thenan employee should not do it.

3. Conflict of Interest Policies

The Company policy regarding possible conflict of in-terest is based on the principle that an employee’s de-cisions in the business must be made solely in the bestinterest of P&G.

As a general rule, an employee or his/her immediate familyshould not have an ownership or profit interest in a com-peting firm or with any firm, supplier, or customer withwhom they deal in their employment.

No employee should have any outside business interestwhich diverts a significant amount of time or attentionfrom duties and responsibilities owed to P&G.

A P&G employee should not participate in decisions withrespect to P&G’s relationship with any customers, sup-pliers or competitors if he/she has a spouse or close rela-tive who is an employee and/or owner of that firm.

A conflict of interest would exist if a P&G employee or arelative provides goods or services to P&G as an indepen-dent supplier.

Employees should never accept entertainment, gifts, trips,sporting event tickets, vacations, personal gratuities, etc.in connection with their work at P&G. This would notinclude very minor items like pens and calendars. Eventtickets may be occasionally accepted when the P&G em-ployee personally pays their value. Business meals maybe accepted if the P&G employee offers to bear the ex-pense on some of the occasions.

4. Confidential/Proprietary Information

Protecting confidential information and materials isvital to the Company’s future success and, therefore,could be important to the job security of all employees.

By accepting employment with P&G, an employee hasaccepted a moral and legal obligation not to disclose con-fidential or trade secret information to third parties, evenif he/she should decide to leave the Company.

Employees should not discuss confidential informationat any time in any public place.

5. Personal Behavior in the Workplace

P&G’s fundamental policy is that we will treat all ofour P&G colleagues with respect.

Actions constituting harassment of any P&G employeeby another employee, customer or supplier are strictlyprohibited, no matter where they occur. Avoidance of actsof harassment is a continuing condition of employmentfor every P&G employee.

Every employee is expected to perform his/her work in asafe manner, free of the influence of alcohol or drugs.

13

Any person who threatens to commit or actually engagesin a violent act on P&G property will be removed fromthe premises and remain off, pending the outcome of aninvestigation into the incident.

6. Commercial Bribery

Any personal payments, bribes or kickbacks to P&Gcustomers or suppliers or the receipt of kickbacks,bribes or personal payments by P&G employees are ab-solutely prohibited.

7. Safety, Health and Environmental Policies

It is the responsibility of employees to be aware of thelaws and regulations that govern their activities andto comply with those laws, using all appropriate cor-porate resources.

All employees associated with the safety assessment ofour products have a responsibility to see that the design,execution and interpretation of research meet the high-est professional and scientific standards so that the Com-pany and the consumer are assured of the best possiblesafety judgments.

With respect to P&G’s EnvironmentalQuality Policy, which states that wewill continually strive to improve theenvironmental quality of our opera-tions, compliance with the law is a corevalue and it is the single highest pri-ority for the Company’s environmen-tal programs.

Every employee must understand and be responsible forincorporating safe behavior and environmental qualityinto their daily business activities.

8. Fairness in Dealing with Customersand Suppliers

P&G’s success depends on building productive relation-ships with our customers and suppliers based on integ-rity, ethical behavior and mutual trust.

All customers are treated fairly and withoutdiscrimination.

All P&G consumer products, including value packs, areavailable for purchase by all competing customers withina given market.

Purchases of materials and services from suppliers arebased on the merits of the purchase opportunities avail-able from competing offers.

All discussions with an existing or potential suppliershould be restricted solely to the Company’s needs. Thereshould be no reference to the Company’s present or po-tential activities with other suppliers.

The Company does not practice or approve of reciprocitywith suppliers in any part of the business.

9. Internal Controls Policy

Internal Controls refers to systems and processes whichcombine policies, authorizations and procedures withproper authority and management tracking andreporting to ensure the business operations areproperly managed. Strong internal controls assistmanagement to deliver required business results. In-adequate controls can lead to actual losses and lostbusiness opportunities.

All managers must ensure that there are appropriate con-trol policies and procedures in their areas of operation,and that these policies are understood and followed.

Every P&G employee must cooperate fully with and pro-vide full and complete information to P&G Internal Con-trol personnel and P&G’s independent external auditors.

10. Financial and Accounting Records Policy

The Company’s business records are relied upon to pro-duce reliable and accurate reports to management,shareholders, creditors, governmental entities and oth-ers. Therefore, it is essential that each employee com-ply strictly with the Company financial control proce-dures and internal accounting systems.

All official records of the conduct of the Company’s busi-ness must be accurate, honest and complete without anyrestriction or qualifications of any kind.

All P&G operations worldwide must comply with all localand national laws relating to accurate and completemaintenance of Company financial books and records.

11. Securities Trading Policy

Employees must not engage in “insider trading” in se-curities based on confidential P&G information, or give“tips” to outsiders who might trade on the basis ofsuch information.

12. Advertising/Promotion Policies

The principle of honesty is a basic operating principleof the Company. Neither deceptive advertising nor ques-tionable promotional activity can ever be justified. Theseare essential tenets of our dedication to consumers andessential to gaining and keeping their continued loy-alty to our brands.

Claims about P&G and competitive products must be sub-stantiated through objective product testing based onsound statistical and scientific principles.

14

13. Antitrust Policy and Compliance Guidelines

It is Company policy that all employees strictly complywith antitrust laws and the competition and anti-monopoly laws of all countries, states and localitiesin which they conduct P&G business.

Supervisors and managers are responsible for ensuringthat employees under their supervision are aware of andcomply with this policy. It is very important for employ-ees to understand this policy so that P&G, and its em-ployees, may avoid even the appearance of an antitrustviolation.

The Company’s general rule is “NO CONTACT WITHCOMPETITORS.”

14. Political Contributions and Related Policies

The Company’s basic policy is that P&G funds or re-sources may not be used to make a political contribu-tion to any political candidate or political party any-where in the world.

Exceptions to the Company’s basic policy are allowed onlywhere such contributions are permitted by law and ex-press permission has been given in advance by the ChiefExecutive of The Procter & Gamble Company.

P&G policy does not permit the use of any P&G facilitiesor resources by employees for political campaigning, po-litical fund raising or partisan political purposes.

A decision by an employee to contribute any personaltime, money or other resources to a political campaign orpolitical activity must be totally voluntary.

Laws covering political contributions by corporations arevery complex. Any questions should be discussed withP&G Legal Counsel.

15. Policy Governing Contacts withGovernment Officials

While honesty is part of the ethical behavior expectedin conducting any P&G business, the need for accuracyand honesty applies with special vigor when providingreports or information to governmental agencies.

It is P&G policy to comply with all applicable laws, rulesand regulations related to lobbying or attempting to in-f luence government officials. Such information providedto governments must be accurate and government offic-ers must be dealt with honestly and ethically.

16. Transacting International Business

Managers and employees of P&G affiliates doing busi-ness around the world are required to conduct theirbusiness activities in compliance with the applicablelaws of these countries.

The Foreign Corrupt Practices Act makes it a crime tomake payment (other than small gifts intended only toexpedite performance of routine actions) directly or indi-rectly to a government official or political party.

United States laws prohibit participation in certain in-ternational boycotts. As a result, any employee who re-ceives a request which relates in any way to an interna-tional boycott should promptly consult with P&G legalcounsel before responding to that request.

It is Company policy to comply with all customs laws andregulations as well as U.S. and foreign Export Controllaws. Consultation with P&G legal counsel early on isencouraged to avoid problems.

Other PoliciesIn addition to the policies described in the WorldwideBusiness Conduct Manual, P&G has adopted the fol-lowing policies which are applicable globally.

Animal TestingEffective July 1, 1999, P&G ended the use of animaltesting for current non-food, non-drug products, ex-cept where required by law. In the future, animal test-ing will only be done when required by law or to evalu-ate the safety of new ingredients and new to the worldproducts for which no validated non-animal tests arecurrently available. This decision applies to all coun-tries where the Company operates. This policy coversa broad range of packaged goods that representsroughly 80 percent of P&G’s total product portfolio,including color cosmetics, shampoos and hair stylingproducts, skin-care products, deodorants, laundry anddishwashing detergents and household cleaners.

DiversityAll leaders within the Company hold themselves and theiremployees accountable for creating and managing a di-verse organization so each individual can contribute tohis or her fullest potential. This includes ensuring we com-ply with the laws of the countries where we operate. Inthose countries where some personal attributes and char-acteristics (like race and gender) require affirmative ac-tion in terms of hiring and representation, we will con-tinue to meet these requirements.

Individuals will help create and maintain a discrimina-tion-free and harassment-free environment that encour-ages people to be themselves by eliminating racism, sex-ism, classism or any other artificial distinction.

All stakeholders associated with P&G (suppliers, contrac-tors, organizations and other individuals) will value di-versity so they are better equipped to contribute to theCompany’s success.

15

External InitiativesListed below are some of the external initiatives thatP&G recognizes as consistent and synergistic withits internal policies.• Alternatives to Animal Testing, http://

www.jhsph.edu/~altweb/• Association Internationale de la Savonnerie de

la detergence et des produits d’Entretien (AISE)Code of Good Environmental Practice – as it ap-plies to our laundry products in 15 countries ofthe European Union plus Iceland, Norway andSwitzerland, http://www.euronet.be/washright/uk/who.html

• Global Environmental Management Initiative,http://www.gemi.org

• The Global Sullivan Principles

BabyCare

BeautyCare

Fabric &HomeCare

FeminineProtection

Food &Beverage

HealthCare

Tissues &Towel

Organizational Structure & ResponsibilitiesIn September, 1998, P&G announced far-reaching changes to its structure, work processes and culture toaccelerate growth. In June, 1999, the Company reported on progress toward this initiative called Orga-nization 2005. The new organization structure, including the move from four geographic business unitsto seven Global Business Units (GBUs) based on product lines, became effective July 1, 1999. The GBUsare responsible for all strategic, manufacturing and sourcing activities. Each of the new GBUs is expectedto integrate sustainability in its business plans.

Each of the new GBUs is expected to integrate sustainability in its business plans. Accountability forsustainable development resides with the GBUs.

A Corporate Sustainable Development department has been formed which focuses on leadership activitiesbest done at a corporate level. This department will focus on:• Defining the Company’s overall sustainability policy• Identifying emerging sustainability issues• Managing corporate reporting• Building relationships with external stakeholders.

This structure builds on, and strengthens, the Company’s long-standing commitment to the environ-ment, while taking a more holistic view that incorporates the social and economic concerns of the Company’sstakeholders.

• International Chamber of Commerce BusinessCharter for Sustainable Development

• Responsible Care™ – as it applies to our chemi-cals business at a limited number of facilities.

• Sustainable Forestry Initiative, http://www.afandpa.org/Forestry/

• World Business Council for Sustainable Devel-opment, http://www.wbcsd.ch

BabyCare

BeautyCare

Fabric &HomeCare

FeminineProtection

Food &Beverage

HealthCare

Tissues &Towel

16

Management SystemsP&G’s Management Systems ensure that theCompany’s policies are implemented in a consistentmanner throughout the world. These managementsystems align with the Company’s policies and pro-mote a regular f low of information that helps theCompany better manage its progress on elements ofsustainable development.

Human and Environmental SafetyProfessional & Regulatory Services (P&RS) – ad-dresses issues related to products and packages.P&RS is responsible for ensuring that products aresafe for consumers, safe for the environment and incompliance with laws and regulations where theyare sold. They also address other environmentalquestions or issues as they arise about products andpackages, such as their compatibility with wastemanagement systems, natural resource use or is-sues of “perceived safety.” P&RS is also responsiblefor ensuring that any claims the Company makesabout the safety or environmental profile of its prod-ucts are scientifically sound.

Risk assessment is the process the Company uses toassess the safety of its products and ingredients. Inthis process, chemical hazard and exposure infor-mation are related in a way that describes the like-lihood for a chemical to adversely affect biologicalsystems. The P&RS organizations in each businessunit work closely with product development teamsin the development, selection and formulation ofproduct ingredients and mixtures with acceptablerisk profiles, as well as satisfying other importantbusiness and consumer needs.

Part of P&RS is the Environmental Science Depart-ment (ESD). The ESD is a resource center for basicscience which develops procedures, data and under-standing that are used to make business decisionsand develop environmental risk assessments. As aCompany resource, its role is to advance science,and develop protocol for understanding and evalu-ating the environmental safety and impact of prod-ucts and packages. It also conducts basic studies intoxicology, microbiology and biodegradation.

Worldwide Health, Safety& Environment SystemsHealth, Safety and Environment (HS&E) is a glo-bal community of resources responsible for ensur-ing that the nearly 150 manufacturing facilitiesworldwide are operated safely and legally; that pro-cess hazards are minimized or eliminated; thathealth risks are identified, managed, or eliminated;and that all waste from sites is reduced as much as

possible. More than 1,700 employees spend all or aportion of their time on HS&E management.

The HS&E organization is made up of threedisciplines: Industrial Hygiene & Safety (IH&S),Technical Safety and Environmental. The IH&Sgroup focuses on protecting the health and safetyof employees. Technical Safety focuses on maintain-ing the safety of capital assets. Environmentalfocuses on protecting the environment throughlegal compliance and reducing emissions to air,water and land.

HS&E’s policy is derived from principles, values,legal requirements and regulatory requirements.The policy is translated into action by standards ofperformance (Mandatory What’s), standardoperating procedures (Mandatory How To’s), andcurrent best approaches (Voluntary System Guid-ance), and reinforced by mandatory annual audits.A regular reassessment of the standards structurepromotes continuous evaluation of the system toimprove performance.

P&G applies a single performance standard to eachof its worldwide manufacturing facilities. This isreinforced by training and mandatory annual au-dits. Facilities have flexibility in how they achievethe standard so that local circumstances can be con-sidered and costs can be controlled.

The Company uses audit scores and performanceagainst a set of critical measures to assess howeffectively sites are implementing the global stan-dard. These measurements are endorsed by Com-pany management and are conducted semi-annu-ally. Overall results are reported to senior manage-ment and to the Public Policy Committee of theBoard of Directors.

At each of P&G’s manufacturing facilities, trainingis provided at three levels: awareness training forall employees, subject-specific training for employ-

Policy

Standards(Mandatory What’s)

Standard Practices(Mandatory How To’s)

Current Best Approaches(Voluntary System Guidance)

Key Element Audit(Mandatory Measure)

17

Contractor Safety ExpectationsThe P&G Environmental Quality Policy makes aCompany commitment to safe operations. Safe,incident free operation at P&G’s sites is a fundamentalexpectation.

The Health & Safety policy expectations forcontractors include:• Compliance with site HS&E expectations and all

applicable laws and regulations.• Training of contract employees on safety issues as

they apply to the job or project.• Periodic review to assure compliance with site

expectations.• Documentation of reviews, performance and

compliance.

Manufacturing Site System Assessments

As a global company, it is important for P&G toevaluate its performance versus recognized

international norms. In 1997, P&G commissionedEnvironmental Resources Management, Inc. (ERM), ahighly respected international environmentalconsulting firm, to perform an independent assess-ment of its HS&E management system. The purposewas to determine whether the system meets theintent of ISO 14001, a global environmental manage-ment standard, as well as the European “Eco-Management and Audit Scheme” (EMAS), a similarregional standard.

The study involved a detailed review of P&G’scorporate policies, organizations and work systems,followed by in-depth, on-site evaluations of fivetypical P&G sites in North America, Europe, LatinAmerica and the Far East. Two additional Europeansites were also evaluated specifically against theEMAS standard.

During the reviews, ERM identified three areas forfurther development. These were management andtraining of external contractors, document control,and reporting on internal audit findings. After P&Gaddressed these areas, ERM concluded: “In ourprofessional opinion, the design and implementationof P&G’s environmental management system meetthe intent of ISO 14001.” They also issued a similarstatement that “P&G’s facilities in Europe, Middle Eastand Africa meet the intent of EMAS.” A moredetailed review of the project is available on request.

ees on the manufacturing floor and formal certifi-cation process training for site HS&E leaders.

Computer based safety training is being used at 90%of P&G’s sites covering over 50% of the plant per-sonnel. The program is currently available in En-glish, Spanish, German, Chinese and Portuguese.Expansion into other languages is anticipated.

Insurance SystemsThe goal of the Corporate Insurance Program is tooptimize the financing of insurable risks to mini-mize costs while providing protection from the ef-fect of potential major loss.

The Program is guided by the following basicprinciples:• The Company’s primary defense against loss is

effective loss prevention programs• Insurance is no substitute for effective loss

prevention.

The Corporate Insurance Program covers those ar-eas of loss and potential loss such as; property dam-age, business interruption resulting from propertydamage, legal liability resulting from property dam-age or personal injury, the legal liability of Direc-tors, Officers, Trustees and employees arising fromthe performance of their duties, and theft.

Fire Protection SystemsP&G operates its fire protection program on thebasic principle that each facility is unique and shouldhave a program designed to meet its specific re-quirements. The Insurance Division, working withthe local management, determines the appropriatelevel of fire protection for each P&G location.

Each facility’s program is organized and built aroundthe following “Key Elements”:

• Protection Engineering• Maintenance and Inspections• Prevention Programs• Emergency Response• Qualified Personnel

Each facility has a Fire Defense Profile that describesin detail the program requirements within each KeyElement. Annual assessments are conducted to verifycompliance with the profile requirements.

Human ResourcesHuman Resources ensures that P&G has the em-ployees to deliver increasing business productivityand to continually improve consumer, employee andshareholder value. They provide recruiting, train-ing, development, diversity, benefits and compen-sation coordination for the Company.

18

It is the Company’s intent to develop all employeesto their full potential. To achieve this goal the fol-lowing support systems are in place:• Career discussions, performance appraisals, as-

signment plans, transfer and promotion plans.• Informal network support groups.• Mentoring to provide informal support and guid-

ance, in addition to coaching and training pro-vided by each employee’s direct manager.

• Open job listings to identify potential growthopportunities.

Global Medical SystemsThe well being, productivity, and innovativeness ofemployees are cr itical elements to P&G’scompetitive advantage. The Global Medical networkadvises and assists management and employees inassuring a safe, healthy work environment throughthe delivery of preventive health and clinical ser-vices which optimize business contributions.

The Global Medical network manages health issuesand allegations which may impact employees, tech-nologies, and brands. The work priorities of the Glo-bal Medical network are to:

1. Save lives (protect employees)2. Obey the law (protect Company reputation)3. Protect key technologies (protect brands)4. Enhance speed to market (protect emerging

technologies)5. Optimize employee productivity.

Information SharingP&G’s presence on the Internet began in March,1996, when the corporate site went live with theU.S. Career Center. Since then, P&G’s presence onthe Internet has expanded considerably. Today, theCorporate Web Site, http://www.pg.com/, providesinformation about the Company as well as provideslinks to the Career Center, Investor Information,and information on P&G products.

P&G also has developed an internal computer net-work for employee communications. The Intranetgives employees access to policies, data, publications,news releases, stock information, training oppor-tunities, technical information and the ability tocommunicate with colleagues around the world.

Community ContributionsP&G makes financial and in-kind contributions toorganizations thoughout the world. Companymanagment has long believed it has an obligationto use its resources for the long term benefit of so-ciety as well as the Company.

To carry out this obligation, P&G makes gifts toorganizations which improve educational qualityand access, and supports activities which enhancethe quality of life for all residents in communitieswith P&G operations. The effectiveness of these con-tributions is enhanced by P&G employee and re-tiree volunteer activities.

Recipients include the colleges which train P&G em-ployees, United Way organizations, cultural insti-tutions, social service and disaster relief agenciesand conservation groups.

Management Systems for Suppliers andthe Supply ChainWorldwide, P&G has over 50,000 suppliers andcontractors including small, entrepreneurial firmsand large multinational conglomerates. The Com-pany bases its worldwide supplier relationshipson fundamental concepts of honesty, fairness,mutual respect and nondiscrimination. P&G en-courages continued supplier support of all kindswhich enhances prosperity and builds sound,long-term relationships.

The Company respects and values healthy com-petition, believing it is essential to a sound busi-ness system. At the same time, additional effortsare made to encourage minority and woman-owned suppliers to do business with P&G.

In addition to developing new technologies thatmake product innovations possible, suppliers are asource of cost saving ideas and efficiency improve-ments that help improve the overall value of P&Gproducts to consumers.

P&G’s purchasing organizations use an overallsupplier management approach known asSupplier Business Development (SBD). The SBDapproach facilitates ef fective relationshipmanagement and helps both parties achieve theappropriate business results. Key, strategic sup-pliers are identified and multi-functional teamsare established to better manage the interdepen-dency in these key relationships.

Sourcing decisions are made on the basis of besttotal value to the Company. Supplier relationshipsare leveraged across business units and regions. Sup-pliers are always treated honestly, ethically andfairly. Stable sources of supply are highly desirable.Supplier research and development efforts are alsoof major value to P&G and are recognized and fac-tored into business allocation decisions.

19

HistoricallyUnderutilizedBusiness ProgramIn 1972, P&G established a minority supplier

program in the U.S. to identify and work withminority-owned businesses. At that time, P&G spent$44,000 with six minority suppliers. In 1981, theCompany assigned its first full-time manager to leadand develop this effort. Today, the HistoricallyUnderutilized Business (HUB) Program is staffed by sixfull-time employees who provide minority supplierswith the following assistance:

• An equal opportunity to do business with P&G• Coaching and feedback• Financial support, where it is needed• Matches between P&G buyers and qualified

suppliers• Timely payment• Realistic and understandable specifications• Development of additional opportunities with

other P&G vendors, including both supplier andstrategic-alliance opportunities.

P&G’s purchases from minority businesses in the U.S.have grown from $76 million in fiscal year 1988/89 to$445 million in fiscal year 1998/99. The target for1999/2000 is $540 million. By fiscal year 2001/2002,P&G will spend about 6 percent of its U.S. businessspending with HUB firms.

P&G views purchasing as an integrated part of itsoverall business strategy and seeks to integrate thesafety and environmental aspects of raw materialpurchases into its everyday relationships with sup-pliers. The Company has also established programswith suppliers to improve one or more aspects of araw material’s environmental profile, or to helpaddress new environmental concerns. The follow-ing are several examples of such programs:• Plastic bottles which contain recycled resin• Surfactants and other product ingredients with

improved biodegradability• Elemental chlorine free and totally chlorine free

bleaching processes for paper pulp• Sustainable forestry practices.

As the Company explores the economic and socialaspects of sustainability as they relate to its per-formance, they will be integrated, as appropriate,into purchasing practices and specifications. ■

HUB Spending

Fiscal Year

0

100

200

300

400

500

600

1996/97 1997/98 1998/99 1999/2000Target

20

Part 5. StakeholderRelationships

The P&G Statement of Purpose identifies theCompany’s key stakeholders – Consumers, Com-

munities, Employees and Shareholders. Othersinclude suppliers, trade customers, retailers, publicinterest groups, regulators, insurers, academia, in-vestment groups, governments and industry groups.

Key Stakeholders Groups andOur Interactions With ThemConsumersConsumers are the people who buy P&G products.Understanding their needs and concerns has been apriority of the Company for many years.

P&G was one of the first companies in the world tohire full-time professionals to study consumer needs.In fact, the Company has been gathering consumerfeedback for more than 70 years.

Many of the research techniques now widely usedacross industry – focus groups, attitude surveys,product tests – were pioneered by P&G. Today, theCompany interacts with more than seven millionconsumers a year throughout the world to learn whatpeople need to make their lives better.

From this process P&G has learned that consumersexpect great performance and value in the productsthey buy. Consumers want products that are safe touse, safe for the environment and safe to manufac-ture. They expect the Company to behave responsi-bly and operate within the requirements of the law.

Many want products made efficiently – avoidingwaste, and using resources wisely. Moreover, con-sumers expect that the Company will answer anyconcern they have about products or the perfor-mance of products.

To understand the needs of consumers, P&G inter-acts with consumers in the following ways:· Attitude surveys· Focus groups· Habits surveys· Products tests· Test markets

· National market shares· Product web sites· Toll free telephone numbers

Understanding consumer needs helps P&G designand deliver products that better meet these needs.Products that have been developed through inter-action with consumers are the ones most likely tosurvive competition in the marketplace.

CommunitiesCommunities that host P&G facilities have a stakein the local operations and performance of theCompany. With on the ground operations inover 70 countries, P&G is intimately involved in thelife of communities around the world. Clearly, the Com-pany has a stake in these communities as well.

It is in these communities where Company employ-ees live, raise their families, educate their childrenand spend their leisure time.

P&G interacts with communities in the follow-ing ways:• Company employees play active roles in their com-

munities by volunteering for local non-profit or-

21

ganizations and schools, providing business ad-vice and perspective for community projects, con-ducting business training for teachers and devel-oping conservation projects.

• The Company provides financial assistance to se-lected community projects. This includes fund-ing for education, cultural activities, health andsocial services and disaster relief.

• P&G sponsors lectures, exhibitions, educationalprojects and site open houses that provide op-portunities to reach out to communities.

• The Company assists communities in planningfor and conducting emergency response drills.

• P&G conducts and sponsors research projectsbased on community concerns.

• P&G has a formal Volunteer Support Programto help employee and retiree volunteers through-out the U.S.

For example, P&G is working with communities toaddress solid waste management. P&G has adaptedthe emerging techniques of lifecycle inventory (LCI)to the waste management field, and has shared the

Understanding and Sharing Information on Waste• SUSTENTA, a Mexican solid waste association promoted by P&G, coordinated an international

seminar on Integrated Solid Waste Management in October, 1998.• P&G scientists are assessing waste water systems around the world to ensure that products designed

to be flushed after use are compatible with household and municipal wastewater treatment systemsin the Company’s growing markets.

• P&G collaborated with the University of the Philippines, Peking University and the Chinese Academyof Science to better understand the fate of products and product ingredients in municipal wastewater systems in the Philippines and in China.

• P&G and 13 other companies in Hungary, have established Ökopannon, a packaging waste recoveryorganization, to support the development of integrated solid waste management systems forlocal communities.

• Through Corporations Supporting Recycling, a Canadian industry association, P&G helped guide thedevelopment of a lifecycle inventory tool for use by communities to guide decisions on wastetreatment options.

All ages participate in Ökopannon’s waste recovery pilot project in Hungary.

Based on a P&Gscientist’s instruction,students from the Universityof the Philippines collectwater samples.

Public PerceptionMeasurement SystemP&G’s Mehoopany, Pennsylvania, USA, paperplant has developed a process to identify com-munity concerns and perceptions about theplant. Plant leaders conduct periodic surveys ofresidents and routinely talk to communityleaders. This process helps the plant identify andprioritize community concerns, measure progresstowards addressing these concerns, and buildstrust and credibility with the community. Recentissues worked with the community include plantodor improvements, local traffic concerns, andcommunity education and information aboutplant efforts to protect the Susquehanna River.

findings with community officials as a way to esti-mate the environmental and cost implications ofhandling solid wastes.

22

EmployeesP&G’s 110,000 employees are akey stakeholder group. Employ-ees are the driving force behindeverything the Company does.As declared by the Company’sCore Values Statement, “Themen and women of P&G willalways be our most importantasset.”

P&G asks its employees for feed-back regarding their career goals,their thoughts on organizationalstructure of the Company, andtheir exper iences with otherstakeholder groups.

P&G interacts with employees inthe following ways:• Career feedback and develop-

ment are managed using Work& Development Plans.

• Employee surveys are conductedperiodically.

• “Connections” – an informaldiscussion forum on theCompany’s Intranet, enables all employees to in-teract with the CEO and senior management.

Periodic questionnaires on the Company’s Intranetallow employees to provide feedback on the useful-ness of selected P&G publications.

ShareholdersShareholders have a financial stake in the perfor-mance of the Company. As of July 23, 1999, therewere 278,245 shareholders of P&G stock. Share-holders are owners of the Company.

P&G reaches out to shareholders in the followingways:• An annual meeting for all shareholders is held

in Cincinnati each year.• The investor relations web site of fers

information to shareholders and invites theircomments, questions, and feedback, http://www.pg.com/investor.

• An automated, toll-free telephone number(1-800-764-7483) is available for shareholderinformation 24 hours a day. (1-513-945-9990outside the U.S.)

In addition to the activities listed above, theCompany is experimenting with a number of pro-grams to interact with and better serve its cor-porate stakeholders.

Other Stakeholder GroupsIn addition to the four key groups, the Companyrecognizes that there are other stakeholders. Theseinclude suppliers, trade customers, retailers, publicinterest groups, regulators, insurers, academia, in-vestment groups, governments and industry groups.

The Company reaches out to these groups in thefollowing ways:• Company publications are available on subjects

ranging from Community Contributions toEnvironmental Management Systems.

• Educational programs covering a variety of is-sues including; dental care, women’s health, solidwaste and parenting.

• Participation in industry groups, like the WorldBusiness Council for Sustainable Development.

• Working with third party organizations to ad-dress stakeholder concerns, like the EuropeanPartners for the Environment.

P&G is continuously seeking ways to reach out tostakeholders. Through these programs, P&G is learn-ing more about the needs of a wide variety of stake-holders around the world. ■

23

Part 6. ManagementPerformance

regularly measures its management performance against mandatory standards and its internalpolicies. These measurements provide a snapshot of the Company.

Compliance with Lawsand RegulationsThere are numerous health, safety and environmen-tal requirements worldwide. Facilities are subject toemission limits and operating requirementsembodied in these statutes, regulations, laws andpermits. It is P&G’s intent to comply with both theletter and spirit of statutes, regulations, laws andpermit requirements. Identified compliance issuesare treated seriously and all non- compliance mat-ters are resolved as expeditiously as possible.

Past three years’ data on environmental, transpor-tation, and worker health and safety violations andinterventions follow:

A breakdown of 1998/99 Notice of Violations(NOVs) and Occupational Safety & Health Act(OSHA) interventions follow:

Number FinesU.S. Clean Water Act 20 $2,600U.S. Clean Air Act 2 0U.S. Department of Transportation 5 $25,000U.S. RCRA (hazardous waste) Paperwork 4 0U.S. OSHA Interventions 12 $150Nuisance Ordinance (non-U.S.) 1 $4,000Wastewater (non-U.S.) 2 $1,500

46 $33,250

Most NOVs associated with the US Clean WaterAct were wastewater related (i.e. pH and oil orgrease) involving 9 separate sites – all of which dis-charged to municipal treatment systems.

Whenever a facility receives a NOV, managementdetermines the cause of the noncompliance and de-velops an action plan to prevent its recurrence. Aninternal audit group then works with business man-agement to ensure that the corrective action hasbeen implemented. In each case above, the NOVhas been resolved.

U.S. OSHA interventions included any employeeor contractor complaint or incident that requiredOSHA follow-up. Last year’s interventions alsoincluded three routine visits or scheduled inspec-tions. It has been three years since the last seriousOSHA citation.

HS&E Program CostsThere are two aspects of Health, Safety & Environ-ment (HS&E) program costs;1) capital costs for new site HS&E equipment2) people and operating costs for existing facilities.

Capital costs for 1998/99 were $44 million to en-sure compliance in new facilities. This included thepurchase and construction of pollution controlequipment such as wastewater pretreatment sys-tems and air emission controls.

HS&E costs for operating existing sites in 1998/99 were $193 million of which $14 million wasoffset by revenue from recycling activities.

Environmental LiabilitiesP&G is also subject to contingencies pursuant toenvironmental laws and regulations that in the fu-ture may require the Company to take action tocorrect the effects on the environment of prior manu-facturing and waste disposal practices. Accruedenvironmental liabilities for remediation and clo-sure costs at June 30, 1999, were $58 million, andin management’s opinion, such accruals are appro-priate based on existing facts and circumstances.Current year expenditures were not material.

1998/99 1997/98 1996/97Number 46 54 56Fines $33,250 $73,100 $14,900

24

Typical P&G Superfund Site InteractionP&G has had limited Superfund liability due to its strong waste management practices which have been in place since1970. As a result, P&G’s typical involvement in Superfund sites has been as a minor Potentially Responsible Party(PRP). The Casmalia situation described below is representative of this involvement.

The Casmalia Superfund Site is an inactive, commercial hazardous waste treatment, storage and recovery facilitylocated in Santa Barbara County, California, USA. In 1993, the U.S. Environmental Protection Agency (EPA) notified anumber of waste generators of their potential liability for environmental problems at the site. Fifty-four of theseparties, including P&G, subsequently formed the Casmalia Steering Committee (“CSC”) and in 1996 negotiated andexecuted a consent decree (“Decree”) with EPA to clean up the site. The Decree provides for certain remedial workincluding the collection and treatment of liquids, the design and construction of landfill caps, and the developmentof other response actions. The CSC members are to fund and perform Phase I work. During the next 3 phases, theroles of the CSC and others have not been defined at this time and will depend in part on EPA’s current efforts toreach cash-out settlements with numerous PRPs. P&G’s share of the CSC cost is 0.3%.

The Nenagh PlantP&G was recently fined for an incident at its Nenagh plant in the Irish Midlands that occurred in August 1996. Thefindings concluded that process waste, to a small degree originating from the plant, together with waste fromothers leaked into a local well. The Company is disappointed at the fine. It continues to maintain that the incidentwas a result of significant deficiencies in the local drainage system, not under its control, to which it legally dis-charged its treated effluent. The Company regrets its indirect involvement in this incident and the inconveniencecaused to Nenagh residents.

The Sacramento PlantIn May 1999, approximately 31,800 liters of product raw material overflowed from a tank in P&G’s plant in Sacra-mento, California, USA. As a precaution, the Sacramento Fire Department was contacted. The fire department’sHazardous Materials Team reported there was no threat to public health. The spill was mostly contained in aconcrete holding area surrounding the tank. The material was a mid-cut ester which is not hazardous, even thoughthe local paper reported otherwise. The plant has reinforced its procedures to prevent such occurrences in the future.

Performance AgainstInternal StandardsP&G’s internal standards go beyond legal compli-ance and apply to all of its facilities worldwide. Thefundamental philosophy is to have the samestandards worldwide, implemented by trained pro-fessionals at all sites, and audited each year using aconsistent, comprehensive approach. The metricsused are consistent with that philosophy. Graphsbelow describe the Health, Safety & Environment(HS&E) performance.

HS&E AuditsThe P&G HS&E Audit Programs are designed toensure compliance with federal, state and local regu-latory requirements as well as Corporate environ-mental standards and procedures. Audit findingsare reported promptly to the business managementteams who must address and correct all issues in atimely manner.

Audits measure performance against a mandatoryset of standards and standard operating procedures.The target performance is eight or better on a tenpoint scale. Currently over 80% of sites worldwideare at the expected performance for Industrial

Health & Safety (IH&S), Environmental Safety,Technical Safety and Fire Protection. Most, if notall, of the remaining sites not at target are acquisi-tions and joint ventures that have been with P&Gfor less than six years.

Percent of Sites with Audit ScoresGreater than 8.0

0

20

40

60

80

100

IH&S Environment TechSafety

FireProtection

1996/971997/98

Target1998/99

25

Currently, 88% of the sites are receiving annualenvironmental audits. For the third year in a row,Europe has completed 100% of its audits.

Health, Safety & Environmental ManagementSystem ImprovementsOne of the recent improvements is the completeredesign of the Company’s HS&E Management Systems.Environmental, Technical Safety and Industrial Hygiene& Safety have merged into one system. Early resultshave shown that the systems have been significantlysimplified while critical technical requirements havebeen maintained.

The highlights of the HS&E management systemredesign are:

Work Process Simplification – The new systemconsolidates three programs into a single program withone set of standards and standard operating proce-dures, one integrated audit, and one set of HS&Epriorities for each site.

Improvements to Increase Productivity –Management systems and audit requirements havebeen reduced.

Increased Focus on High Risk & TechnologySystems – Sites are focusing on “high risk” andcritical systems.

Site Leadership TrainingAnother key indicator of system capability is thepercentage of sites with trained and qualified envi-ronmental leaders. Leadership candidates train foran extensive period of time on site prior to attend-ing a week long school where their knowledge andability to handle special situations are assessed. Onlythen are candidates considered qualified. Currently,over 50% of sites worldwide have leaders qualifiedby the Corporate staff.

This is the last year Environmental, TechnicalSafety, and Industrial Hygiene & Safety willbe reported separately since the Company hasmoved to an integrated HS&E ManagementSystem. Fire Protection will continue to be man-aged separately.

Understanding and balancing economic, environ-mental and social issues are an important partof leadership in sustainable development. TheHS&E management system has undergone a tre-mendous change with the integration of the threesystems at all sites. While P&G has reached impor-tant levels of success in its health, safety andenvironmental efforts, the Company is committedto continue to pursue technology and systems thatmake it a benchmark.

Percent of Sites with Qualified Leaders

0

20

40

60

80

100

IH&S Environment TechSafety

FireProtection

1996/971997/981998/99

Target

Sites Conducting Annual Audits

0

20

40

60

80

100

1996/97 1997/98 1998/99

Perc

en

t

Target

26

External RecognitionBelow is a list of key awards and recognition re-ceived by the Company over the past year.

Company Awards• No. 1, America’s Most Admired Companies,

Soap and Cosmetics Industry, FortuneMagazine, 1999.

• Interactive Marketer of the Year, AdvertisingAge, 1999.

• Hispanic Corporate 100, Hispanic Magazine,1999.

• Annual Worldwide CIO 100 for use ofinformation technology in business, CIOMagazine, 1998.

• Enterprise Value Award for achieving dramaticbusiness value through innovative applicationof information technology, CIO Magazine,1998.

• Worldwide Best in Class Data Wide-Area Com-munications Network, Gartner GroupBenchmarking, 1998.

• 2nd Most Admired Company in Venezuela,Inversiones Magazine, 1999

• ProGro and Power Ranking Awards for non-edible grocery and health and beauty care,Progressive Grocer Magazine, 1998.

• “Brand of the Year” awards to: Pantene Pro-V,“Best Shampoo Brand;” Tide, “Best WashingPowder Brand;” Blend-a-Med, “Best Tooth-paste Brand” and the overall Company, “MostTrusted Organization” — ahead of Russianflagship companies, Russia, 1998.

• Donor of the Year, Second Harvest, 1998.

Employer Awards• Top 50 Best Companies for Latina to Work for

in America, LATINA Style Magazine, 1999.• Optima Program, Spanish Institute for Women

in recognition of P&G’s diversity efforts, 1999.• No. 11 in a list of the top 50 companies which

accommodate employees with disabilities,Careers and the disABLED Magazine, 1999.

• 100 Best Companies for Working Mothers(13th year), Working Mother Magazine, 1999.

• 100 Best Companies to Work For in America,Fortune Magazine, 1998.

• Top 25 Companies for Executive Women,Working Woman Magazine, 1998.

• Catalyst Award for demonstrated success atmoving women into leadership positions,Catalyst, 1998.

• Top 100 Employers, Black Collegian Magazine,1998.

• No. 1 in Recruiting and Retention Survey,National Society of Black Engineers, 1998.

• Premio a la Equidad (Equity Award), to P&GPeru in recognition of P&G’s labour policy pro-tecting the rights of women, Peru Ministry ofWomen’s Affairs and Human Development,1998.

• Second Annual Golden Ladder Award, as oneof the top 10 companies that accommodateemployees with disabilities, WE Magazine,1998.

• Employers Hall of Fame, Careers and the Disa-bled Magazine, 1998.

Environmental Awards• William H. Phelps Environmental Award;

Venezuela Headquarters, BarutaMunicipality, Caracas, Venezuela, 1998.

• Environmental Protection Award; Tianjin BarSoap Plant, Mayor, Tianjin City, China, 1998.

• Corporate Award; Urban Litter Partnership,Keep America Beautiful, 1998.

• Environmental and Energy AchievementAward; Albany Plant, New York, USA, Ameri-can Forest & Paper Association, 1998.

• Health, Hygiene and Education Award,Bombay Chamber of Commerce and Industry,1998.

Safety Awards• Award of Best Honor for the best safety record;

Ivorydale Beauty Care Plant, Ohio, USA, Na-tional Safety Council, 1998.

• Excellence in Safety Award; Canada Manufac-turing Facilities, Canadian Chemical Producers,1998.

P&G receivedthe CatalystAward fordemonstratedsuccess atmovingwomen intoleadershippositions.

27

External ActivitiesSustainability Activities• P&G promoted the creation of a local business

council for sustainable development in Ven-ezuela. The new organization, CEVEDES, ispart of the global network of business coun-cils affiliated with the World and Latin Ameri-can Business Councils.

• An International Sustainable DevelopmentSymposium in Taipei was coordinated byP&G with the Taiwan Soap & Detergent Asso-ciation. Attendees included non-governmentalorganizations, industry, academia and govern-ment officials.

Social Activities• A seminar in Cincinnati, Ohio, USA, to encour-

age local companies to employ people with dis-abilities was hosted by P&G, in May 1999.

• P&G created an awards program to honoroutstanding family oriented television pro-grams in conjunction with the Forum for Re-sponsible Advertisers, in April 1999.

• P&G joined a new alliance, comprised of15 organizations from private and public sec-tors, dedicated to fighting vitamin A deficiency,in March 1999.

• March 1999, The William McConnell EducationCenter, an environmental and historic park,opened in Lexington, Kentucky, USA. P&G wasa key funding partner. The site, previously anurban industrial dump site, now has nature trailsand a visitor center.

• P&G’s Pampers brand and Fisher-Price an-nounced a joint project to donate andrenovate toddler playgrounds throughout West-ern Europe, in February 1999.

Economic Activities• June, 1999, P&G Eastern Europe completed the

initial $50 million investment program for theNovomoskovsk plant in Russia.

• P&G announced plans to invest $150 millionto expand its existing plant in Chachoengsao,Thailand, in May 1999.

• March 1999, P&G, Johnson & Johnson andEastman Kodak formed a Consumer ProductsManufacturer’s Consortium to create and licensea global security standard which will help pre-vent product counterfeiting and theft.

• P&G announced plans to increase productioncapacity in bar soap and liquid laundry deter-gent, and a capital investment of $20 million atthe Ivorydale Plant in St. Bernard, Ohio, USA,in October 1998.

• August 1998, P&G hosted a meeting of interac-tive marketing and technology industry stake-

holders to accelerate development of effectiveadvertising models and to identify ways to en-sure interactive media is available to all people.

• P&G announced plans to convert its soap plantin Hamilton, Ontario, Canada, to a distributioncenter. The Company also announced plans tobuild a 300,000 square foot facility in ButlerCounty, north of Cincinnati, Ohio, USA, to houseits Manufacturing, Supply and Technology Groupin August 1998.

Environmental Activities• March 1999, Phase 1 of GREAT-ER, a tool to

predict environmental concentrations of down-the-drain chemicals in selected river basins inEurope, was completed on schedule. P&G led theproject, involving partners from industry,academia and regulatory agencies. The tool,a CD-ROM modeling program, was distributedat the European Union Technical Meeting forRisk Assessment.

• Summer 1998, Automobile gasoline cap check-ing program to improve air quality in Cincin-nati, Ohio, USA, was sponsored by P&G, otherindustries and a regional council of governments.

• A promotion to raise money for tree planting inJapan was conducted by P&G in cooperation with55 retail stores. The promotion resulted in about15,000 trees being planted by volunteers. ■

28

Part 7. OperationalPerformance

Overview

has developed a comprehensive system ofmeasuring performance throughout the Company.The Company measures operational performance inorder to drive continuous improvement. This ap-proach enables the Company to report data on awide range of operational categories. Some of thesedata are included in this report.

Process for Data CollectionAll data are reported on a global basis. In order toachieve consistency and ensure a common under-standing throughout the organization, employeesare trained in how to report and document data.Metric units are used for weights and English isused as the business language (backed up with localtranslations where needed).

To ensure the standard collection of data, the Com-pany has the following work processes in place:• Key terms are defined.• The data to be collected are identified.• Flow sheets are agreed upon regarding who col-

lects data and on what systems.• Technically sound methods are used by facilities

to estimate data and validate year-to-year re-sults.

• Personnel are trained on the work processes, asappropriate.

P&G’s data collection systems are designed to besimple enough so that the people closest to the work,regardless of location, can use the tools. This sim-plicity enables the Company to collect data andupdate systems annually at a relatively low cost.Each business unit is responsible for the accuracyand consistency of the data.

Acquisitions and DivestituresAll facilities that operate during the fiscal yearreporting period are included in the data of thisreport. For divestitures, wastes and emissions areestimated for the last year that they operated.

Industrial Hygiene & SafetyThe health and safety of P&G employees are of para-mount importance to the Company.

The Company tracks and reports two metrics forworker health and safety; total incident rate (TIR)and total lost workday case rate (LWDC). TIR in-cludes all cases that result in loss of consciousness,lost workdays, restriction of work or motion, medi-cal transfer to another job or medical treatmentbeyond first aid. LWDC includes all cases that in-volve days away from work, or days of restrictedactivity beyond the day of injury or onset of illness.

The TIR target for sites is to be below 1.5 cases peryear, per 100 employees. To achieve such rates, pro-grams to address employee safety such as safe be-haviors, ergonomics, and confined space entry havebeen implemented. No target has been set for LWDC.Instead, incidents that potentially could lead to lostworkdays are managed.

The following data are based on criteria establishedby P&G for use at all worldwide facilities. The dataare representative of all P&G manufacturing facili-ties, worldwide.

Total Incident Rate(injury and illness per 100 employees)

0.0

0.3

0.6

0.9

1.2

1.5

1996/97 1997/98 1998/99

TIR

Target

29

Product, Packaging and Manufacturing DataAs the diagram below illustrates, P&G’s use of material resources is highly efficient. The vast majority ofmaterials are converted to products and the output of manufacturing waste (which are largely non-hazardous) is low. To give the reader a more comprehensive understanding of materials used, data, inmetric tons, for packaging and manufacturing operations are provided on page 5.

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

0.0

0.3

0.6

0.9

1.2

1.5

1996/97 1997/98 1998/99

LWD

C R

ate

30

Product & Packaging TrendsThe Company achieved record shipments for the yearending June 30, 1999. Packaging for product re-mains less than 10% of total volume shipped.

Recycled material is used in a variety of packagesfrom corrugated shipping cartons to plastic bottles.More than 30% of the material that P&G uses forpackaging is from recycled sources.

Manufacturing TrendsWith the exception of Energy, the data in this sec-tion have been indexed against a 1990/91 baseline,and adjusted for sales growth. For absolute figures,see page 5 of this report.

Energy UseP&G’s use of energy is primarily concentrated in itsmanufacturing processes. This year energy use in-creased slightly versus last year, however, it is 44%of the 1984/85 baseline, adjusted for sales growth.

The Company’s energy management program con-sists of loss analyses at the site level and life cyclecost analyses during the engineering phase. At thesite level, energy use is considered a loss. Losses aredefined as anything not shipped out the door asproduct. When energy is identified as a major lossat a site, it receives focus for reduction.

Energy use for new projects is evaluated by lookingat costs through the life cycle. This analysis com-pares capital costs to ongoing expenses. For example,spending money to fully insulate a building is com-pared to the ongoing expense of heating or coolingthe same building.

Water UseTo date, P&G has not corporately tracked water useat its facilities. This year water tracking has beeninitiated at all manufacturing sites worldwide, andwill be reported next year.

A number of facilities have already identified wateruse as an area for reductions. These facilities havereduced water use through recycling, changes in rawmaterial sources and reusing water to irrigate greenareas around facilities.

Reductions in Water UseHere are examples of how some plants arereducing water use.

• Tissue and towel facilities in Witzenhausen,Germany, and Apizaco, Mexico, have imple-mented long-term process changes to increasewater recycling. Also, on-line membranefiltration, that allows the use of recycled waterin the paper making process, has been success-fully pilot tested at Witzenhausen.

• The Mariscala Beauty Care plant in Guanajuato,Mexico, is now treating all process water andusing the water for on-site irrigation.

• Through a series of capital improvements, theVallejo detergent plant in Mexico City, Mexico,has become a “zero waste water” processoperation. The plant reuses 100% of itsindustrial waste water.

• In the Philippines, the Cabuyao soap anddetergent plant changed raw material sourcesto reduce process waste and water use.

• The Kansas City coffee plant, Kansas, USA, hasinstalled a closed-loop system for coolingwater, reducing water use and effluent fromthe facility.

• The Beirut, Lebanon, Fabric and Home Careplant reduced the amount of COD generatedby 66%. The facility controlled leaking pumpsand valves and installed a recycling system forthe process washout water.

0

3000

6000

9000

12000

15000

1996/97

ProductPackaging

1997/98 1998/99

Tho

usa

nd

Metr

ic T

on

s

Product & Packaging Volume Shipped

0

20

40

60

80

100

1996/97 1997/98 1998/99

Ind

exed

vs.

1984/8

5

Energy Use

Fuel Electricity

0

20

40

60

80

100

1996/97 1997/98 1998/99

Perc

en

tag

e

Recycled Material Used in Packaging

31

Non-Product Output (Waste)Each facility worldwide tracks and reports all wastethat leaves the site. In this section, waste is reportedby management process.

Non-Hazardous Waste DisposedNon-hazardous waste disposed is defined as the solidwaste landfilled, incinerated, or specially treated.Recycled waste is not included in this measure. Dis-posed non-hazardous waste decreased 7.4 indexpoints this year, due to increased awareness at theplants, improved separation processes, and an in-crease in recycling. “Design Manufacturing WasteOut” efforts on upstream projects also continue toreduce waste.

Waste Recycled or ReusedRecycling and reuse have been significant effortswithin the Company to minimize impacts onthe environment. Over the last 3 years the recy-cling/reuse rate has ranged from 56% to 67%, andcontributed between $14 and $20 million in rev-enue annually.

Hazardous Waste DisposedHazardous wastes are defined by regional policiesand local rules and thus vary among regions. Glo-bally, reported hazardous waste increased in 1998/99 because wastes that are not classified in somecountries or regions are now being reported as haz-ardous waste. This also includes 12,000 metric tonsof contaminated soil from the Manchester, UK, site.

In the U.S., a strong focus on reduction, recyclingand material substitution has reduced the amountof hazardous waste requiring disposal over the lastthree years. To further reduce risks, the Companyinspects hazardous waste sites annually and main-tains a limited number of hazardous waste han-dling and disposal vendors.

Non-Product Output to AirSites monitor total suspended particulates (TSP),volatile organic compounds (VOCs), carbon mon-oxide (CO), nitrogen oxides (NOx), and sulfur diox-ide (SO2). The total amount of air emissions hasincreased three index points from last year due to aglobal expansion in the Tissues & Towel businessand better worldwide reporting.

0

20

40

60

80

100

1996/97 1997/98 1998/99

Ind

exed

vs.

1990/9

1

Non-Hazardous Waste Disposed

0

20

40

60

80

100

1996/97 1997/98 1998/99

Perc

en

tag

e

Waste Recycled or Reused

0

20

40

60

80

100

1996/97 1997/98 1998/99

Ind

exed

vs.

1990/9

1

Hazardous Solid Waste Disposed

0

20

40

60

80

100

1996/97 1997/98 1998/99

Ind

exed

vs.

1990/9

1

Hazardous Waste DisposedU.S. Sites Only

0

20

40

60

80

100

1996/97 1997/98 1998/99

Ind

exed

vs.

1990/9

1

Air Emissions

NOxSO2

VOCsCO

TSP

32

Reductions in Material and Energy Useand WasteHere are a few examples of waste, material andenergy reductions at P&G facilities:

• Energy use in the Crailsheim, Germany, paperplant has been reduced by reusing heat fromair compressors.

• The Millstone coffee plant in Henderson,Kentucky, USA, has made process changes thatreduce both air emissions and energy use.

• The Green Bay plant, located in Wisconsin,USA, found a use for fines (short paperfibers). The plant pays to send the fines to alocal company for re-use in lightweightpaperboard production. An on-site incinera-

tor, previously used for fine disposal, hasbeen shut down.

• The Lucca, Italy, site installed machin-ery to separate plastic and paper scrapfrom finished product. The plastic issold, and the paper is recycled withinthe plant.

• The Pampers plant in Euskirchen,Germany, is producing a newbikini-shaped baby diaper thateliminates trim waste from themanufacturing process.

Carbon dioxide emissions have remained flat, andare 70% lower than the 1990 baseline. The decreasefrom 1990 resulted from the sale of pulp mills inthe United States and Canada, and the conversionfrom coal to natural gas in the United Kingdomand China.

Non-Product Output to WaterEf f luent waste includes oxygen consumingsubstances in water (measured as COD – chemicaloxygen demand) but excludes water. The amountof COD leaving sites has decreased by nearly elevenindex points this year. The main contributions tothis reduction were from the Ivorydale site inCincinnati, Ohio, USA, through higher reliabilityand effective loss analysis and lower production atthe Sacramento, California, USA, plant.

Pollutant Release and Transfer RegistersGlobally, many countries are considering some typeof public reporting of toxic releases and transfers.In the U.S., P&G facilities report annually on therelease of toxic chemicals to the land, air and wa-ter. These releases are defined in the U.S. SuperfundAmendments and Reauthorization Act (SARA) bythe U.S. Environmental Protection Agency. Totalreleases and transfers are down 70% versus the1990 baseline.

Pampers Plant in Euskirchen, Germany

0

20

40

60

80

100

1996/97 1997/98 1998/99

Ind

exed

vs.

1990/9

1

Greenhouse Gas (CO2) Emissions

0

20

40

60

80

100

1996/97 1997/98 1998/99

Ind

exed

vs.

1990/9

1

Wastewater COD Disposed

0

20

40

60

80

100

1996/97 1997/98 1998/99In

dexed

vs.

1990/9

1

SARA 313 (U.S. Only)Released or Transferred

33

DisabilitiesEmploying people with disabilities is part of P&G’s commitment to diversity. The Company workswith employees with disabilities to ensure a positive working environment so that they can develop totheir full potential. P&G is committed to improve its hiring of people with disabilities and will focus onthe following:

• Nearly one million dollars will be spent in the next year to upgrade facilities and offices to meet theneeds of workers with disabilities.

• A master plan is being prepared for all of the Company’s technical centers to determine how peoplewith disabilities can be accommodated and welcomed in the workplace.

• A team of P&G employees is visiting major companies across the US to benchmark what the best aredoing regarding hiring and accommodating people with disabilities.

Community DonationsTotal P&G philanthropic contributions in 1998/99 were $73.2 million, an increase of $6.39 million(+9.5%) versus 1997/98. This represents 1.25% of worldwide pre-tax earnings versus 1.17% in1997/98. Contributions for the past three years are provided in the following table:

Here are a few of the ways P&G is making a difference in the communities where it operates:

• In Canada, P&G has supported KEY, a founda-tion providing environmental education to teach-ers. Each year, the program holds three week-long summer conferences for teachers who thenapply what they learned to benefit students inthe classroom.

• P&G’s Mariscala Plant is located in a small vil-lage in Mexico. Since the opening of the facilitysix years ago, P&G has built a school for specialeducation students, provided water to the com-munity during dry seasons, and offered environ-mental training to schools in the region. As partof Fondo Unido (United Way), P&G also has pro-vided funds for a children’s hospital and a pro-gram to house homeless children.For ten years, P&G has partnered with Earl Haig

Secondary School in Toronto, Canada, to teach highschool students leadership and business manage-ment skills that prepare them for future careers.

Social PerformanceDiversityA diverse workforce is a business advantage in understanding the needs and differences of people aroundthe world. P&G expects its workforce to become even more diverse in the future. This is a global policy andprograms are in place for continual improvement in all regions. The percentages of minority and womenemployees in the United States are shown in the following table:

% Minorities % Women1998/99 1997/98 1996/97 1998/99 1997/98 1996/97

Management 15.0 15.6 15.5 38.4 38.0 37.5Technicians, Laborers, Service Workers 18.1 18.6 18.6 41.7 41.1 40.8 Total 16.9 17.4 17.4 40.4 39.9 39.5

Worldwide P&G Philanthropic Contributions1998/99 1997/98 1996/97

Total $73,245,604 $66,859,204 $60,616,378

34

• This past year, P&G’s TargowekPlant in Warsaw, Poland, discov-ered an innovative way to putleftover detergent to good use.The detergent is donated to12 homeless shelters where it isused to clean and wash clothes.This innovative idea saves theshelters money and reduces wastefor P&G.

Progress on Animal TestingJuly 1, 1999, P&G announced that it would no longer conduct animal tests for current beauty, fabric andhome care, and paper products, except where required by law. This was a major step towards the Company’sultimate goal of eliminating animal testing. In the future, animal testing will only be done when requiredby law or to evaluate the safety of new ingredients and new to the world products for which no valid non-animal tests are currently available.

Over the last 15 years, P&G has invested nearly $100 million in the study and development of alterna-tive research methods. These methods include the development of historical research databases, computermodels, in vitro tests and other advances in toxicology.

P&G will continue to support research to develop non-animal test methods for food, drugs and newingredients and technologies. The Company actively advocates reforms around the world to speed up theapproval of reliable, non-animal test methods and to eliminate regulations that require unnecessaryanimal tests.

Additional information on P&G’s support for alternatives to animal testing can be found at http://www.pg.com/animalalternatives/. ■

In Venezuela, P&G is helping students contribute to their educa-tion. Through Mision Futuro (Mission for the Future), studentsredeem used packages of P&G products for school equipment.Nearly 70% of the schools in Venezuela participate in the program.

35

Part 8. Product Performance

Overview

Product innovation is at the core of P&G’ssuccess throughout its history. P&G innovation

focuses on –

Setting new performance standards in existing cat-egories such as:

• Tide and Ariel compact deter-gents that remove stains andsanitize laundry while protectingthe original fabric colors.

• Pampers Rash Guard, thefirst diaper specificallydesigned to protect againstdiaper rash.

Creating entirely new categories andbenefits like:

• Febreze, an odor eliminating fabricspray.

• Dryel, a product that allows con-sumers to clean and freshen “dryclean only” clothes at home.

• Swiffer, a new cleaning system thatmore effectively removesdust, dirt and hair fromf loors and other hardsurfaces.

P&G’s unique innovative capability is based on threekey characteristics:

• A deep understanding of consumers, their hab-its and product needs.

• The capability to acquire, develop and applytechnology across P&G’s broad array of productcategories.

• The ability to make “connections” between con-sumers’ wants and what technology can deliver.

This year, P&G invested $1.7 billion, 4.5% of netsales in research and development – one of the largestamounts among consumer product companies in theworld. The Company employs over 7,500 scientists

working in 22 research centers in 12 countries aroundthe world. Of the Company’s scientists, 1,250 holdPh.D. degrees, which is more than the combined sci-ence faculties of Harvard, Stanford and MIT.

P&G’s innovation is evident in the 25,000 patentsthat the Company currently holds, making it oneof the world’s leaders in number of U.S. andglobal patents.

Major Impacts Associatedwith ProductsImpacts associated with products don’t exist in iso-lation. They span across all aspects of sustainabledevelopment. Certain impacts can be more closelyassociated with one area than others and that ishow the following section has been organized.

EconomicP&G and its products have impacts that go beyondthe Company’s balance sheet.

The Company works across the entire product sup-ply chain to enhance the value of raw materials,and to build relationships with suppliers and re-tailers that provide mutual economic benefits.

The Company works to get unnecessary costs out ofthe system while still delivering high quality prod-ucts to consumers.

P&G’s broad range of consumer products contrib-utes to economic prosperity for employees, suppli-ers, retailers, shareholders and communities wherethe Company operates.

The Company’s products have impacts on the dis-tribution, solid waste and water treatment infra-structures of the communities where its productsare made, sold, and used.

The Company pays taxes and fees in the communi-ties in which it operates and makes voluntary con-tributions to organizations in those communities.

36

SocialThe major social benefits of P&G products are im-proved health and hygiene for consumers. P&G prod-ucts are an important part of many consumers’ dailybathing and cleaning routines.

P&G products make clothes cleaner, babies drier andsmiles healthier.

• In the U.S., Tide with Bleach sanitizes laundry,killing at least 99.9% of bacteria and isregistered with the U.S. Environmental Protec-tion Agency.

• Pampers Rash Guard is the first diaper specifi-cally designed to protect against diaper rash.

• Crest toothpaste was the first toothpaste withfluoride clinically proven to fight cavities.

In addition to the health and hygiene benefits, manyof the Company’s products, like Crest and Always,also have an important educational component.Improving education, self esteem and offering su-perior performance are just as important to theCompany as healthy bodies.

EnvironmentalMaterial use, waste disposal, energyand water use are of concern to theCompany and to many of its stake-holders. The Company is able to ac-count for and manage the use ofraw materials, water and energywithin its manufacturing opera-tions. However, it is more difficultto measure and reduce resource useassociated with raw material sourc-ing, distr ibution, product useand disposal.

The amount of energy and waterused with consumer products de-pends in part on consumer habitsand practices, which vary widelyaround the world. For example, whether the waterused is hot or cold and whether a machine is used

or clothes are hand washed impacts the amount ofenergy used for clothes washing.

One of the ways in which P&G is working to reduceenvironmental impacts throughout the product lifecycle is by making products that use less raw mate-rial. P&G first introduced concentrated laundry de-tergents in Europe in 1989. Today, they are soldaround the world. A life cycle study, done underU.S. manufacturing conditions, indicates that con-centrated laundry detergents save 0.6 gigajoules ofenergy for every 1,000 loads of laundry, the equiva-lent of slightly more than 14 liters of gasoline. Con-centrated detergents also use less packaging, result-ing in less solid waste for disposal.

Waste disposal of down-the-drain products and solidwastes varies with local conditions and infrastruc-tures. P&G designs all of its products for safe dis-posal in order to minimize environmental impacts.More than 30% of the material that P&G uses forpackaging is from recycled sources. Packages are de-signed with recycling in mind, although actual re-cycling depends on local markets and programs.

P&G also has monitored the impacts of down-the-drain products on water quality inrivers, streams and municipal wa-ter treatment facilities for years. TheCompany is beginning to examinethe broader issue of water; its use inmanufacturing facilities, its use byconsumers and the availability ofclean water around the world.

P&G continues to address these is-sues as the Company works to re-duce waste and resource use throughevery part of the product life cycle.

P&G’s Support for SETAC Helps Make Products Safer, Advances Risk SciencesSince 1979, P&G has supported the efforts of the Society of Environmental Toxicology and Chemistry(SETAC), a non-profit professional society devoted to advancing multi-disciplinary approaches to solvingenviromental problems. SETAC’s membership extends across business, goverment and academic sectors,offering an important forum for P&G scientists, engineers and risk managers to participate in theexchange of ideals and principles underlying sound environmental management policies. Now withgrowing units in North America, Europe, Latin America and the Asia-Pacific region, the ecological riskassessment tools developed through SETAC help P&G and other companies evaluate the safety of newproduct and packaging systems. In addition to serving on numerous SETAC Boards, panels and advisorygroups, P&G is proud to sponsor a pre-doctoral fellowship award in SETAC.

Raw Material Sourcing

Processing

Manufacture

Distribution

Use

Post-consumer Displosal

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Product DevelopmentP&G’s product development process is followedvirtually every time the Company develops anew product or makes a significant change to anestablished brand. The process has four phases:Concept, Development, Evaluation, and Execution.These phases are designed to ensure that productsmeet important consumer needs and are safe.They also are used to manage risk and improve fi-nancial return.

The Concept Phase identifies an important con-sumer need or needs, using research with consum-ers from around the world. Once a need is estab-lished, the Company looks at ways to meet the iden-tified need based on P&G’s technologies and busi-ness strategies. The result of this work — the con-cept, is an approach to meeting the consumer need.

In the Development Phase, the concept is furtherrefined into a product that will meet the consumerneed. The Company identifies raw materials, pack-aging, manufacturing and distribution systems thatwill be necessary to deliver the product to consum-ers. Initial evaluations are made of human safety,environmental safety, market concerns and the eco-nomic impacts of the product on the Company andits shareholders.

A variety of tools are used to ensure the productwill be safe for people and the environment. (SeeProduct Development Tools Chart) The manufac-turing process also is examined to ensure that healthand safety issues for employees and communitiesare addressed. A regulatory assessment is done to

ensure compliance with applicable laws andregulations, both where the product is manufac-tured and marketed. The Company also looks atthe economic impacts on investment, jobs, profitand growth.

During this phase, P&G conducts consumer researchto be sure the product meets the consumer need.Employees and consumers sample the actual prod-uct. Often, small batches or one-of-a-kind modelsof products are used to gain consumer feedback be-fore the product is manufactured on a larger scale.It can take many tries before the Company developsjust the right combination of ingredients for thefinal product.

In the Evaluation Phase, the Company confirmsthe product’s viability with a wider group of con-sumers. P&G manufactures the product at theCompany’s facilities, ships it through the distribu-tion system to target communities, and sells it toconsumers. In this phase, the Company gets a bet-ter idea about consumer acceptance, distributionissues and profit potential.

In the final phase, the Execution Phase, the prod-uct moves into national or global distribution chan-nels. Sales projections are confirmed. Ongoing moni-toring of the product is conducted through theCompany’s consumer relations department.Throughout this phase, P&G is continuously look-ing at ways to improve products to increase theirvalue to consumers. Other ongoing programs in-clude reducing costs, increasing reliability, qualify-ing additional suppliers and improving performance.

Design Manufacturing Waste OutWhile waste reduction has alwaysbeen a key focus area for us, in 1996we introduced a process to ensurewe focus even more sharply oneliminating waste in our manufactur-ing processes, and set a goal to save$300 million by 2000. Design Manu-facturing Waste Out (DMWO) uses aseries of “think lists” to help teamsdeveloping the product and manu-facturing processes to eliminatewaste up front. This saves both rawmaterials and money. Over the pastyear, over 100 new projects haveundergone DMWO reviews. This yearthe program exceeded $300 millionin cumulative savings, one yearahead of schedule.

Goal1. Human and environ-

mental safety

2. Regulatorycompliance

3. Efficient resourceuse and wastemanagement

4. Addressing societalconcern

ToolsHuman health risk assessmentEcological risk assessment

Manufacturing site management system auditsManufacturing site waste reportingMaterials consumption reportingNew chemicals testing & registrationProduct and package classification & labeling

Material consumption monitoringManufacturing site management system auditsManufacturing site environmental auditsSupplier auditsDisposal company auditsProduct life cycle inventoryDesign Manufacturing Waste OutEconomic analysis

Opinion surveysConsumer researchNetworkingPresentationsLobbyingCorporate reportingProblem solving

Product Development Tools

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Global Shampoo PackagingA newly designed bottle is replac-ing the bottle previously used bymany of P&G’s leading shampoobrands. Designed to reducematerial use and improve han-dling, the new bottle saves 2000metric tons of plastic, enough tofill an Olympic-sized swimmingpool, each year.

Dawn Saves the Day – Again!Greasy messes are nochallenge for Dawndishwashing liquid. Notonly does Dawn cutgrease on dishes, buthighway officials creditDawn for the clean-up of two greasy spillson Cincinnati, Ohio, USA, highways lastyear. From animal fat to biscuit dough,Dawn cut the grease and the highways re-opened in record time.

Dental Care Education BrightensSmiles in ZimbabweP&G is a sustaining member of Health VolunteersOverseas, a group dedicated to improving the avail-ability of health care in developing countriesthrough training and education. In Zimbabwe,health care workers trained by the program useCrest toothpaste educational materials to improvedental hygiene in remote villages.

Crest SchoolsProgram ImprovesDental HygieneFor thirty years, P&G’sCrest Schools Program hasprovided dental health edu-cation to elementary stu-dents in the United States.Today, children around the

world have the opportunity to learn about gooddental hygiene through global school programssponsored by Crest and Blend-a-Med toothpastes.

P&G PromotesSelf-Esteem forTeenagers in MexicoIn Latin America, studieshave shown that manywomen have low self-es-teem. To address this,P&G’s Always femininehygiene products introduced a program to improvewomen’s self-esteem by reminding them that theycan aspire to live a fulfilling life through increasededucation, personal hygiene and the reinforcement

of their family values. The education pro-gram targets teenagers and is based on aseries of lectures in school classrooms and acolorful magazine.

ImprovedDishwashing Deter-gent Cleans Best inLow TemperaturesNew Fairy Tab-in-Tabautomatic dishwashing

detergent provides tough food cleaning in low tem-perature wash cycles. The innovative use of en-zymes delivers two to three times more cleaningwhile saving consumers water and electricity.

VOCs Re-duced inHairspraysP&G has takenan innovativeapproach to re-ducing VOCs(volatile organiccompounds) inhairsprays. Aconcentrated formula and new package deliverhairspray more efficiently, using 25% less pack-aging and with lower VOC emissions than con-ventional hairsprays. Consumers in California,USA, are the first to try this new hairspray.

Recent Product News

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Systems to AssistConsumers in ProperUse and Disposalof ProductsIn order to ensure consumers use and dis-pose of products and packages safely, P&Ghas the following systems in place:

Advertising — creates awarenessof Company products, provides informa-tion on how and when to use theproducts, and educates consumers regard-ing product benefits.

Global Waste & Recycling Net-works — help educate consumers and bet-ter enable them to properly dispose of prod-ucts and packages.

Labeling and Instructions — provideappropriate information on how to use theproducts.

Packaging — increases shelf life of products,allows for efficient distribution, enhances prod-uct use, reduces product tampering and contami-nation, and provides space for product informa-tion, usage and disposal instructions.

Poison Control — partners with the Companyregarding how to respond when the Company’sproducts are used improperly.

Toll-free Telephone Numbers — allow con-sumers to call with questions and problems aboutproducts and packaging. P&G receives around 2.5

million contacts a year from consumers.Around 86% are calls, 7% are e-mail and7% are postal mail.

Websites — provide information aboutproduct benefits and contact informationfor specific questions about products.

Work with Appliance Manufactur-ers — allows the Company to conduct on-going tests of how products respond to newand improved appliances. ■

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Part 9. Sustainability Overview

T he year 1999 marks two importantsustainability milestones for P&G. The first is

the creation of the Corporate Sustainable Develop-ment organization that Durk Jager outlined in Part1 of this report. The second is our move from anannual Environmental Progress Report to thisSustainability Report, including participation in theGlobal Reporting Initiative’s (GRI) pilot ofa standardized reporting format.

For the past two years, we have had aworldwide team of P&G people analyzinghow sustainable development could andshould relate to our business. We realizedthat P&G, to date, could be described as asustainable corporation. Over the past 162years, P&G has changed and reinventeditself many times. Today, it is a $38 bil-lion global company with on the groundoperations in over 70 countries, productssold in over 140 countries, and over110,000 employees. But, the challenge for us as asustainable corporation is how will we change andevolve to improve the lives of the world’s consum-ers, such that we continue to exist and thrive intothe future.

The creation of P&G’s Corporate SustainableDevelopment department marks a strategicdecision to more closely align our business with themore holistic concept of sustainability, taking ad-vantage of the broader “umbrella” which encom-passes economic development, social equity and en-vironmental protection.

Sustainability aligns very well with our Company’sStatement of Purpose which describes the synergyamong meeting the needs of our consumers, build-ing our sales and profit and contributing to theprosperity of our employees, shareholders and com-munities. This is not to say that we are definingsustainability as “business as usual.” Instead, wesee sustainability as an opportunity to address needsthat are today unmet. Needs that are driven by thesix billion people on this planet, which may grow toeight to ten billion in the next century.

Malnutrition affects 50% of the world’s popula-tion. Water borne diseases, lack of sanitation, lackof hygiene and health care, and other problems af-fect populations in areas without adequate infra-structures. For P&G, sustainable development willcome to life, and bring value where it intersects withour ability to bring innovation to bear on issues of

health, hygiene, environment, nutrition,education and the overall quality of life ofboth today’s and future consumers.

The decision to move from an annualEnvironmental Progress Report to aSustainability Report is, of course,closely related to our decision to strate-gical ly embrace the concept ofsustainability. We have been publishingan Environmental Report since 1993.With each report we used market re-search tools to understand the informa-tion needs of our target audience, and

to sharpen the content.

As we again reviewed our target audience for thisSustainability Report, we chose external thoughtleaders, non-governmental organizations, academ-ics, social investors and governments as our pri-mary focus. This is a smaller audience than we havetraditionally tried to satisfy.

Having settled on this audience, it then becameimportant to format our report in a way thatbest met their needs. This is where participationin the pilot project of the GRI became opportune,since the GRI was made up of a global crosssection of our chosen target audience. Furthermore,participation in the GRI pilot provided us both aneasy means of obtaining customer feedback on thisyear’s report, and an opportunity to have an im-pact on the format of the report itself, from asupplier’s viewpoint.

This year’s report continues our evolution towardspaperless reporting. Therefore, this year’s report isavailable in its entirety on our corporate web site,http://www.pg.com/99sr. In addition, for those that

George D.Carpenter,Director ofCorporateSustainableDevelopment

41

do not have Internet access, we have publishedan abridged Executive Summary which includeskey sustainability data and charts. I hope thatour attempt to address your needs, as the consum-ers of this report, meets with your approval. I en-courage you to contact us if you have any questionsor comments.

George D. CarpenterDirector, Corporate Sustainable Development

To request an Executive Summary of this report,write to:

Corporate Sustainable DevelopmentTwo P&G PlazaTN-02 MS-28Cincinnati, OH, 45202 USA

Fax: (513) 983-5226E-mail: sustainrep-im@pg.com

Editor: Keith Zook, P&G, Cincinnati, Ohio, USA.Core Report Team: Margaret Gerber, P&G,

Cincinnati, Ohio, USA; Chris Smith, P&G,Newcastle Upon Tyne, UK; Robin Tollett, P&G,Cincinnati, Ohio, USA.

Writing: John Swartzbaugh, EnvironmentalTechnologies and Communications, Inc.,Cincinnati, Ohio, USA.

Design: Andy Ruttle, Ruttle Design Group, Inc.,Cincinnati, Ohio, USA.

The report team wishes to thank all theindividuals throughout the Company whocontributed information, stories and datato this report.