Last Earnings Release 04/27/2012. Last Qtr. Actual vs. Est. $0.94 / $0.93. Next Release 07/30/2012 $0.82. Year Ending 06/30/2012 $3.

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Grade Earnings Last Earnings Release 04/27/2012 Last Qtr. Actual vs. Est. $0.94 / $0.93 Next Release 07/30/2012 $0.82 Year Ending 06/30/2012 $3.

28 05/04/2012 Rated 'SELL' since May 3rd, 2012, when it was downgraded from 'HOLD' Year Ending 06/30/2013 $4.19 Market Cap $176.

(PG), based on a final overall grade of scored by the company's fundamental analysis. Procter & Gamble Co.

Our present rating dates to May 3, 2012, when it was downgraded from a HOLD.

1 Grade Earnings Last Earnings Release 04/27/2012 Last Qtr. Actual vs. Est. $0.94 / $0.93 Next Release 07/30/2012 $0.82 Year Ending 06/30/2012 $3.86 Quick Facts Dividend Yield 3.31% 52 Wk High $ Wk Low $58.51 Short Interest 1% of float $ /04/2012 Rated 'SELL' since May 3rd, 2012, when it was downgraded from 'HOLD' Year Ending 06/30/2013 $4.19 Market Cap $176.8B Overview Company Scores Poor Fundamental Grades MarketGrader currently has a SELL rating on Procter & Gamble Co. (PG), based on a final overall grade of scored by the company's fundamental analysis. Procter & Gamble Co. scores at the 50th percentile among all 6068 North American equities currently followed by MarketGrader. Our present rating dates to May 3, 2012, when it was downgraded from a HOLD. Relative to the Household/Personal Care sub-industry, which is comprised of 27 companies, 's grade of ranks 14th. The industry grade leader is The Female Health Co. (FHCO) with an overall grade of The stock has performed poorly in the last six months in relative terms, up 3.53% compared with the Household/Personal Care sub-industry, up 21.07% and the S&P 500 Index, up 18.29%. Please go to pages two and three of this report for a complete breakdown of PG's fundamental analysis. Price, Rating and Sentiment History - 2 Years 1

Growth C Investors Betting on a Turnaround Must Be Cautious as Company's Growth Record is Still Very Weak Procter & Gamble has been struggling with anemic sales growth for some Market Growth LT D

11 billion in the Market Growth ST D 12 months ended last quarter, only a modest 3.69% gain from three years EPS Growth C earlier, when total revenue in the equivalent 12 month period was $82.

It said in its latest announcement that last quarter's total sales were $20.19 billion Earnings Momentum C compared to $20.23 billion a year earlier.

2 Growth C Investors Betting on a Turnaround Must Be Cautious as Company's Growth Record is Still Very Weak Procter & Gamble has been struggling with anemic sales growth for some Market Growth LT D time and now, based on its latest quarterly report, it has dipped into negative territory. The company had total revenue of $85.11 billion in the Market Growth ST D 12 months ended last quarter, only a modest 3.69% gain from three years EPS Growth C earlier, when total revenue in the equivalent 12 month period was $82.08 billion. And now sales have started to decline as evidenced by the 0.18% Growth Potential D year-over-year decline recently reported by the company. It said in its latest announcement that last quarter's total sales were $20.19 billion Earnings Momentum C compared to $20.23 billion a year earlier. These results underscore a very worrisome trend marked not only by a recent downturn in Procter & Earnings Surprise B- Gamble's business but also an inability to show sustainable long term growth that could lead to higher profits. In its latest report the company also said profit fell from the comparable quarter a year ago, extending its long term profit decline. We measure long term profit growth by comparing full year (12-month trailing) net income to the equivalent period three years earlier. Procter & Gamble posted a First quarter profit decrease of 17.26% to $2.38 billion from $2.87 billion (excluding extraordinary items) a year earlier; it also reported a 2.44% drop in profit in the 12 months ended last quarter to $9.60 billion from the $9.84 billion it made in the same period three years before. The company's ongoing margin contraction continued during its most recent quarter but at a slower pace than the two preceding periods; its EBITDA, operating and net margins fell by an average 0.66% compared to the year earlier period. The company reported earnings on April 27, 2012 that were 1.00% higher than the analysts' consensus estimate; however, the stock fell 4.83% following the announcement. Despite a cool reaction from investors, this latest report helped ensure the company maintains a positive earnings surprise record, having exceeded analysts' expected earnings by an average 1.17% over the last six quarters. Revenue Qtrly. 03/31/2012 $20.2B Revenue Qtrly. Year Ago $20.2B Revenue 1 Yr. Chg. (0.18%) Revenue 12 Mo. Tr. Latest $85.1B Revenue 12 Mo. Tr. 3Y Ago $82.1B Revenue 12 Mo. Tr. 3Y Chg. 3.69% Net Income Qtrly. 03/31/2012 $2.4B Net Income Qtrly. Year Ago $2.9B Net Income 1 Yr. Chg. (16.08%) Net Income 12 Mo. Tr. Latest $9.6B Net Income 12 Mo. Tr. 3Y Ago $11.9B Net Income 12 Mo. Tr. 3Y Chg. (19.11%) Value B Stock's Valuation Already Reflects Past Financial Results and Isn't Without Risk at this Point Procter & Gamble's stock, currently priced at times trailing 12- Capital Structure B+ month' earnings per share, trades 0.38% higher than our "optimum" P/E ratio of This ratio, calculated by MarketGrader, is determined by P/E Analysis B- the growth in the company's earnings in the last two years, measured Price/Book Ratio D over 12-month rolling periods. Based on this formula Procter & Gamble has grown earnings per share at a -5.19% annualized rate during the last Price/Cash Flow Ratio A two years. The recent contraction in profit margins could contribute to further deterioration in EPS growth and also lead to lower Profitability Price/Sales Ratio B+ grades, both of which would have a negative effect on the stock. The stock's forward P/E of 15.34, based on estimates for the next four Market Value D quarters, is higher than the S&P 500's forward P/E of but lower than its trailing P/E. The lower multiple investors are paying for its future earnings compared to past earnings reflects how high expectations are for future earnings growth, which run ahead of expectations for the market as a whole. Considering the company's poor overall fundamentals this premium over the S&P appears risky and sets up the stock for a significant fall if future earnings disappoint. Procter & Gamble's are trading at 2.95 times their book value, which is based on the company's stockholders' equity. However, MarketGrader's price to book value analysis is based on a company's tangible book value, which excludes goodwill and other intangibles from its assets. In this case, Procter & Gambles' intangible assets of $86.26 billion exceed its $64.06 billion in stockholders' equity by $22.20 billion, which means its tangible book value is negative. This makes the shares' price to tangible book ratio meaningless. Thus, part of the risk of owning the company's shares lies in the possibility of a significant write-down of its intangible assets, which would automatically make its shares much more expensive than they currently appear to be. The stock's price to cash flow ratio of 14.35, based on the $4.48 in cash flow per share generated by Procter & Gamble. in the last four quarters, could be interpreted as investors' unwillingness to pay too much for the company's earnings prospects in light of its overall fundamental weakness. Its price to sales ratio of 2.07, based on trailing 12-month sales, is 99.70% lower than the Household/Personal Care average ratio. Finally, from a value perspective, we look at how much bigger the company's market capitalization is than its latest operating profits after subtracting taxes. According to this calculation the company's current market cap is excessive at times its quarterly net income (plus depreciation, a non-cash charge to earnings). P/E Ratio 12 Mo. Tr. 03/31/ Optimum P/E Ratio Forward P/E Ratio S&P 500 Forward P/E Ratio Price to (Tangible) Book Ratio 2.95 Price-to-Cash Flow Ratio Price/Sales Ratio

Profitability B While Company's Profitability Grades Are Pretty Solid, They Offer Plenty of Room for Improvement While most of Procter & Gamble's profitability indicators are positive, the Asset

after next quarter's report. This is despite operating Operating Margins A- margins that exceed its industry average and a net profit of $9.

The average operating margin for the Household/Personal Care industry was 13.23% during the same Return on Equity C period, 32.76% below the company's 19.31%.

3 Profitability B While Company's Profitability Grades Are Pretty Solid, They Offer Plenty of Room for Improvement While most of Procter & Gamble's profitability indicators are positive, the Asset Utilization B+ company's return on shareholder equity, based on 12-month trailing results--an important MarketGrader indicator--is pretty weak and should Capital Utilization C be watched closely after next quarter's report. This is despite operating Operating Margins A- margins that exceed its industry average and a net profit of $9.64 billion earned by the company during the same period, equivalent to 11.32% of Relative Margins A+ total revenue, a solid net profit margin. The average operating margin for the Household/Personal Care industry was 13.23% during the same Return on Equity C period, 32.76% below the company's 19.31%. Procter & Gamble's return on equity deteriorated significantly during the last twelve months to Quality of Revenues B % from the year earlier period's 17.43%. Although the most recent value is still acceptable, it underscores a worrisome trend in an indicator MarketGrader considers very important in measuring the company's management's efficiency. This mild slowdown doesn't pose any immediate threats to the health of the company's capital structure, which is very conservatively managed. Its total debt is equal to less than three quarters of its total equity, including long term debt that accounts for 24.64% of total capital. Procter & Gamble's core earnings in the last twelve months grew moderately from the twelve months ended a year earlier. The company's EBITDA for the most recent period was $21.43 billion, or 17.11% above the $18.30 billion earned from its core operations in the prior period. EBITDA is used by MarketGrader to measure the company's true earnings power since it includes interest expenses, income taxes, depreciation and amortization, all non-operating expenses, which are nevertheless accounted for in other parts of our analysis that look at EPS gains and net income. Cash Flow A- Company's Cash Flow Indicators Are Solid Across the Board but Offer Some Room for Improvement Procter & Gamble's cash flow fell slightly during the last quarter to $3.82 Cash Flow Growth D billion from $4.06 billion a year earlier, a 5.92% decline. What's more important and worth highlighting is the fact that up to the most recent EBIDTA Margin B+ quarter the company's twelve month trailing cash flow was growing very Debt/Cash Flow Ratio A+ healthily, up 3.62% compared to the same period ended a year before. This marks a sharp slowdown in the company's business environment Interest Cov. Capacity A+ and is likely to put considerable pressure on its margins. The company's 6.23 net debt to EBITDA ratio at the end of last quarter was almost Economic Value A unchanged from last year's 6.17, which suggests it has no problems managing its leverage from the cash flow it generates from operations. Retention Rate A+ The ratio is based on $29.12 billion in net debt, defined as total debt minus cash on hand, and EBITDA of $4.67 billion. In the last twelve months its total debt as a percentage of total capital also increased, in this case by 5.50% from 31.90% a year ago to 33.66% in the company's latest quarter. However, Procter & Gamble's cash on hand is now 35.47% more than it was a year before, suggesting its increased leverage is well within its means to service it and might contribute to future growth. An important indicator of management efficiency used by MarketGrader is Economic Value Added, or EVA, which measures each company's true return to shareholders after accounting not only for the cost of running the business (operating costs) but also the cost of the capital it employs. By measuring the real cost of capital, both equity and debt, EVA measures the creation of true economic profit. In this case Procter & Gamble had $86.61 billion in invested capital in its most recent quarter, a combination of both equity and long term debt. However, the company's weighted cost of equity of 3.44% is much larger than the weighted cost of debt, which is 0.59%. When combined, the two result in a total cost of capital of 4.03%, quite low compared to the company's total return on invested capital of 18.98% based on 12-month trailing operating income. The result is an excellent economic value added of 14.95%, a very high return to investors after all capital costs are covered. The company increased its quarterly common dividend on December 31, 2011 by 7.05%, to cents a share from cents. It has now distributed dividends uninterrupted for at least five years and based on this latest payout the stock is currently yielding 3.31%. The $5.87 billion Procter & Gamble spent in the last 12 months in common dividend payments raises questions about its liquidity in light of generally poor fundamentals. Total dividends paid during this period represent 44.60% of total cash flow and 60.77% of after-tax earnings, an increase from an already elevated 57.29% payout ratio in the 12 months ended just a quarter earlier. Unless the company pares back its payout or quickly improves its profitability, this situation threatens to further erode its liquidity and jeopardize its balance sheet. Cash Flow Qtrly. 03/31/2012 $3.8B Cash Flow Qtrly Year Ago $4.1B Cash Flow 1 Yr. Chg. (5.92%) Cash Flow 12 Mo. Tr. Latest $13.2B Cash Flow 12 Mo. Tr. 3Y Ago $14B Cash Flow 12 Mo. Tr. 3Y Chg. (6.15%) Free Cash Flow Last Qtr. $1.4B Economic Value Total Invested Capital $98.4B Return on Inv. Capital 18.98% Weighted Cost of Equity 3.44% Weighted Cost of Debt 0.59% Total Cost of Capital 4.03% Economic Value Added 14.95% 3

It is organized under three Global Business Units: Beauty and Grooming, Health and Well-Being and Household Care. The Beauty and Grooming unit includes the Beauty and the Grooming businesses.

personal cleansing). The Health and Well-Being unit includes the Health Care and the Snacks and Pet Care businesses.

4 Profile manufactures a wide range of consumer goods. It focuses on providing branded consumer packaged goods. The company's products are sold in over 180 countries worldwide through mass merchandisers, grocery stores, membership club stores, drug stores and neighborhood stores. It is organized under three Global Business Units: Beauty and Grooming, Health and Well-Being and Household Care. The Beauty and Grooming unit includes the Beauty and the Grooming businesses. The Beauty business is comprised of female beauty products (including cosmetics, deodorants, female blades and razors, personal cleansing and skin care), hair care (including both retail and salon professional) and prestige fragrances. The Grooming business includes electric hair removal devices, home appliances, male blades and razors and male personal care products (including deodorants, face and shave products, hair care and personal cleansing). The Health and Well-Being unit includes the Health Care and the Snacks and Pet Care businesses. The Health Care business includes feminine care, oral care and personal health care. The Snacks and Pet Care business includes snacks and pet food. The Household Care unit includes the Fabric Care and Home Care as well as the Baby Care and Family Care businesses. The Fabric Care and Home Care business includes air care, batteries, dish care, fabric care and surface care. The Baby Care and Family Care business includes baby wipes, bath tissue, diapers, facial tissue and paper towels. The company reports six business segments, including Beauty, Grooming, Health Care, Snacks and Pet Care, Fabric Care and Home Care, and Baby Care and Family Care. The company was founded by William Procter and James Gamble in 1837 and is headquartered in Cincinnati, OH. Key Facts: 1 Procter & Gamble Plaza Cincinnati,OH Phone: Biggest Company in Sub-Industry (PG) Grade Market Cap:$ billion Smallest Company in Sub-Industry Alta Natural Herbs & Supp Grade 39.0 Market Cap:$0.65 million MarketGrader Dilution Analysis Impact of Change in Shares on EPS - Q Dilution Summary Income Statement Last Qtr (03/2012) 12 Mo. Trailing Revenue $20.2B $85.1B *EPS Latest $0.79 *EPS Year Ago $0.96 EPS Change 1 Yr. (18%) C. Shares - Latest(M) 2,938 C. Shares - Yr Ago(M) 2,999 C. Shares - 1Yr Chg. (2%) EPS if Yr. Ago Shares $0.77 EPS Chg. if Yr. Ago (19%) EPS Loss from Dilution $0.02 *Earnings per share are based on fully diluted net income per share excluding extrodinary items. This number may not match the headline number reported by the company. Op. Income $3.8B $16.4B Net Income $2.4B $9.6B *EPS $ *Earnings per share are based on fully diluted net income per share excluding extrodinary items. This number may not match the headline number reported by the company. Balance Sheet Total Assets Total Debt Latest $134.6B $33.1B Stockholders Eq. $65.3B All numbers in millions except EPS Ratios Price/Earnings (12 mo. trailing) Price/Tangible Book 2.95 Price/Cash Flow Price/Sales 2.07 Debt/Cash Flow Return on Equity 14.70% Gross Margin (12 mo. trailing) 50.10% Total Assets Intangible Assets $134.6B $86.3B '07 '08 '09 '10 '11 '12 Qtr Operating Margin (12 mo. trailing) 19.31% Net Profit Margin (12 mo. trailing) 11.28% Long Term Debt $21.3B Qtr Total Debt Book Value Enterprise Value $33.1B $64.1B $29.1B Qtr Qtr

Top Down Analysis Consumer Staples Stocks in Sector: 240 Buys: 44 (18.33%) Holds: 53 (22.08%) Sells: 143 (59.58%) No. of stocks at: 52-Wk. High: 1 52-Wk.

High: 0 52-Wk. Low: 0 Above 50 & 200-day MA: 9 Below 50 & 200-day MA: 11 # Ticker Grade Sentiment Name Price Next EPS 1 DAR 81.34 N Darling International, Inc. $15.79 05/14/2012 2 GMCR 78.

79 P Monster Beverage Corp. $66.74 05/07/2012 6 HLF 75.59 P Herbalife Ltd. $46.94 08/01/2012 7 NUS 74.87 P Nu Skin Enterprises, Inc. $44.47 07/30/2012 8 SAM 72.20 N Boston Beer Co., Inc. $109.

5 Top Down Analysis Consumer Staples Stocks in Sector: 240 Buys: 44 (18.33%) Holds: 53 (22.08%) Sells: 143 (59.58%) No. of stocks at: 52-Wk. High: 1 52-Wk. Low: 5 Above 50 & 200-day MA: 93 Below 50 & 200-day MA: 89 Household/Personal Care Stocks in Sub-Industry: 27 Buys: 7 (25.93%) Holds: 3 (11.11%) Sells: 17 (62.96%) No. of stocks at: 52-Wk. High: 0 52-Wk. Low: 0 Above 50 & 200-day MA: 9 Below 50 & 200-day MA: 11 # Ticker Grade Sentiment Name Price Next EPS 1 DAR N Darling International, Inc. $ /14/ GMCR N Green Mountain Coffee Roasters, Inc. $ /27/ FHCO P The Female Health Co. $ /01/ USNA P USANA Health Sciences, Inc. $ /23/ MNST P Monster Beverage Corp. $ /07/ HLF P Herbalife Ltd. $ /01/ NUS P Nu Skin Enterprises, Inc. $ /30/ SAM N Boston Beer Co., Inc. $ /02/ DMND N Diamond Foods, Inc. $21.18 N/A 10 GAGA N Le Gaga Holdings Ltd. $ /11/ PG 1 P $ /30/2012 # Ticker Grade Sentiment Name Price Next EPS 1 FHCO P The Female Health Co. $ /01/ USNA P USANA Health Sciences, Inc. $ /23/ NUS P Nu Skin Enterprises, Inc. $ /30/ EL P Estee Lauder Cos., Inc. $ /15/ CHD P Church & Dwight Co., Inc. $ /06/ CL P Colgate-Palmolive Co. $ /30/ KMB P Kimberly-Clark Corp. $ /26/ PGG.CA N Polo Biology Global Group Corp. $0.02 N/A 9 PBH P Prestige Brands Holdings, Inc. $ /17/ RDEN P Elizabeth Arden, Inc. $ /13/ PG 1 P $ /30/ Price Trend. B+ 2. Price Momentum. C 3. Earnings Guidance. B- 4. Short Interest. A+ 7.0 Copyright 2010 MarketGrader.com Corp. All rights reserved. Any unauthorized use or disclosure is prohibited. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or any options, futures or other derivatives related to such securities ("related investments"). The information herein was obtained from various sources; we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regards to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur. MarketGrader does not make markets in any of the securities mentioned in this report. MarketGrader does not have any investment banking relationships. MarketGrader and its employees may have long/short positions or holdings in the securities or other related investments of companies mentioned herein. Officers or Directors of MarketGrader.com Corp. are not employees of covered companies. MarketGrader or any of its employees do not own shares equal to one percent or more of the company in this report. 5

Verizon Communications Inc.

Verizon Communications Inc. Grade Earnings Last Earnings Release 10/19/2017 Last Qtr. Actual vs. Est. $0.98 / $0.97 Next Release 01/23/2018 $0.98 Year Ending 12/31/2016 $3.90 Quick Facts Dividend Yield 4.37% 52 Wk High $54.64 52