Chairman John Pepper, and President and Chief Executive A. G. Lafley addressed The Procter & Gamble Company shareholders at the company's annual meeting today. Lafley told shareholders he is confident in the company's ability to deliver business and financial results despite turbulent times.

"While we do not under-estimate for a minute the challenges and risks ahead, we believe based on experience in troubled economies across the world, that P&G weathers downturns reasonably well," Lafley said. "Typically, our industry and our company have performed better than most in tough economic times."

Lafley said the company remains focused on its mission and what it does best -creating and building brands that deliver superior consumer value and businesses that deliver superior shareholder value.

"We won't allow the tyranny of terrorism to deter us from P&G's mission of improving consumers' lives," Lafley said.

P&G will not report results for the July-September period, the first quarter of its fiscal year, until October 30. However, Lafley said he is encouraged by the "steady progress" the company has made over the past six months. He attributed the progress to the focus on leading brands, big countries and top customers, and clear strategic choices.

"The focus on leading brands at top customers in our biggest markets is starting to pay off," Lafley said. "Eight of our 11 billion dollar brands are worldwide category leaders, and shipments to top customers are up 7%."

Reporting on the progress of P&G's restructuring programs that began three years ago, Lafley said the transition to a new organization structure is producing new ways to become more effective and efficient. "As a result, we are restructuring some of our businesses, writing off or writing down less productive assets, and even shutting down brands or selling off businesses that are under-performing or no longer strategic," he said.

The total restructuring efforts are on track and are expected to generate about $2 billion in annual savings by 2004. Some of these savings will flow to the bottom line and some will be reinvested to accelerate growth.

He also covered how P&G is driving out costs that do not deliver consumer or shareholder value. The company has reduced costs in every business by maximizing restructuring savings, continuing cost savings programs, taking advantage of softening packaging and raw material markets, and leveraging global scale in reverse auctions.

Lafley talked about striking the right balance for optimum consumer and shareholder value. "P&G is not a cost story; it is not a growth at any cost story. P&G is a consistent, reliable, superior shareholder return story."

Dividend Announcement

Prior to the start of the annual meeting of shareholders, directors declared a quarterly dividend of $0.38 per share on the common stock and series A ESOP convertible preferred stock, payable on or after November 15, 2001 to shareholders of record at the close of business on October 19, 2001.

All statements, other than statements of historical fact included in this news release, are forward looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. In addition to the risks and uncertainties noted in this news release, there are certain factors that could cause results to differ materially from those anticipated by some of the statements made. These include achievement of the business unit volume and income growth projections, the achievement of the Company's cost containment goals, any adverse effects related to or arising out of the events of September 11, 2001 as well as factors listed in Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's most recently filed Forms 10-K and 8-Ks.

P&G markets more than 250 brands including Pampers, Tide, Ariel, Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin, Downy, Lenor, Iams, Olay, Crest, Vicks and Actonel. P&G employs nearly 106,000 people in more than 80 countries worldwide. For more information about P&G, please visit our website at www.pg.com.