CINCINNATI–(BUSINESS WIRE)–The Procter Gamble Company (NYSE:PG) delivered four percent sales
growth to $22.1 billion for the October – December quarter. Growth was
driven by higher volume and pricing actions, partially offset by
geographic and product mix. The Company continued to deliver broad-based
organic sales growth, with all six business segments up versus the prior
year. Diluted net earnings per share were $0.57 per share, reflecting
non-core charges of $0.53 per share. The non-core items included a $0.50
per share non-cash impairment charge associated with the Appliances and
Salon Professional businesses. Core net earnings per share were $1.10,
toward the high end of the Company’s expectations for the quarter.
“We continue to make progress against our key business priorities in a
difficult macroeconomic environment”
“We continue to make progress against our key business priorities in a
difficult macroeconomic environment,” said Chairman of the Board,
President and Chief Executive Officer Bob McDonald. “We delivered solid
top-line growth and continued to accelerate productivity improvements to
drive down costs. With the easing of commodity cost comparisons over the
next two quarters, continued solid top-line growth and cost savings
progress, we expect operating profit growth to accelerate in the second
half of the fiscal year.”
Executive Summary
-
Net sales and organic sales increased four percent for the quarter.
-
Organic sales growth was broad-based, with all six business segments
growing for the second consecutive quarter.
-
Core net earnings per share decreased three percent to $1.10. The
benefits from solid sales growth and cost savings were more than
offset by higher commodity costs.
-
Diluted net earnings per share were $0.57 per share, down 49 percent
primarily due to non-core charges of $0.53 per share. The non-core
charges included a one-time $0.50 per share non-cash impairment charge
associated with the Appliances and Salon Professional businesses.
-
Operating cash flow was $3.3 billion for the quarter.
October – December Quarter Discussion
Net sales increased four percent to $22.1 billion in the October –
December quarter. Organic sales also grew four percent. Volume increased
one percent behind overall market growth, initiatives and continued
market expansions. Volume grew at high single-digit rates in developing
regions. This growth was partially offset by a mid-single-digit decrease
in developed regions. Broad-based price increases across all segments
and geographies, designed to recover higher commodity costs and
devaluing developing market currencies, increased net sales by four
percent. Geographic and product mix reduced net sales by one percent.
Diluted net earnings per share were $0.57, a decrease of 49 percent
primarily due to non-core charges of $0.53 per share which include a
$0.50 per share non-cash impairment charge. Gross margin contracted 210
basis points due mainly to higher commodity costs, partially offset by
pricing and manufacturing cost savings. Selling, general and
administrative expenses (SGA) as a percentage of net sales improved 150
basis points behind net sales leverage, a reduction in overhead spending
and lower charges for non-core items. Including the impact of non-core
items, operating margin declined 760 basis points.
Excluding the non-core items, core net earnings per share were $1.10,
and core operating margin declined 160 basis points.
Operating cash flow was $3.3 billion for the quarter and free cash flow
was $2.4 billion. The Company repurchased $0.5 billion of shares during
the quarter and returned $1.5 billion of cash to shareholders as
dividends.
Goodwill and Intangibles Impairment
During the quarter, the Company took a non-cash charge of $1.5 billion
after tax, or $0.50 per share, to adjust the carrying values of goodwill
in the Appliances and Salon Professional businesses, and trade name
intangible assets in the Salon Professional business. The impairments
were primarily driven by the prolonged deterioration of the
macroeconomic environment, the more discretionary nature of the
products, and increasing levels of competitive activity. Together, these
factors have led to a reduction in expected market size and growth rates
for both businesses. This is particularly the case in the Western Europe
market, where roughly 50 percent of PG’s Appliances and Salon
Professional sales are generated. As a result of these factors, the
Company recently has reduced the sales, earnings and cash flow forecasts
for these businesses.
Business Segment Discussion
-
Beauty net sales increased one percent to $5.4 billion on unit volume
growth of one percent. Organic sales grew two percent on two percent
organic volume growth. Price increases added three percent to net
sales growth. Mix reduced net sales by four percent due to
disproportionate growth in developing regions, which have lower than
segment average selling prices, and a decrease in the premium-priced
product categories. Favorable foreign exchange increased net sales by
one percent. Volume grew high single digits in developing markets and
decreased mid-single digits in developed regions. Volume in Hair Care
increased mid-single digits behind high-single-digit growth in
developing regions due to product innovation activity and distribution
expansions in Asia, while developed regions decreased mid-single
digits. Volume in Skin Care, Personal Care and Cosmetics decreased low
single digits due to the Zest and Infasil divestitures, Olay share
loss in developed markets and the volume impact of price increases due
to consumer value differences relative to competitive products in
North America. Volume in Salon Professional declined high single
digits due to market contraction in Europe, distribution share losses
and non-strategic brand discontinuations. Volume in Prestige Products
decreased low single digits driven by minor brand divestitures and a
strong initiative base in the prior year, offset by current year
market growth and initiatives for SK-II. Net earnings declined eight
percent to $802 million as higher commodity costs more than offset the
impact of sales growth.
-
Grooming net sales increased one percent to $2.2 billion. Unit volume
increased one percent. Organic sales were up two percent. Price
increases added two percent to net sales growth, while unfavorable
product mix decreased net sales by two percent mainly due to a
reduction in premium appliances, which have higher than segment
average selling prices. Volume grew high single digits in developing
regions and decreased mid-single digits in developed regions. Shave
Care volume grew low single digits due to high single-digit growth in
developing regions behind product and commercial innovation, Fusion
ProGlide geographic expansion and market growth, partially offset by a
mid-single-digit decrease in developed regions due to market
contraction and competitive activity. Volume in Appliances decreased
double digits primarily due to a decrease in Western Europe as markets
contracted and competitive activity increased. Net earnings increased
two percent to $517 million, largely consistent with net sales growth.
The decline in gross margin due to unfavorable geographic and product
mix was offset by lower SGA.
-
Health Care net sales and organic sales increased one percent to $3.2
billion on unit volume that was in line with the prior year period.
Pricing increased net sales by three percent. Unfavorable product and
geographic mix reduced net sales by two percent. Volume increased low
single digits in developing regions and decreased low single digits in
developed regions. Oral Care volume decreased low single digits due to
a strong initiative base period in North America and current
competitive activity. Volume in Feminine Care grew low single digits
driven by mid-single digit growth in developing markets due to a new
distributor start-up in CEEMEA and market growth and product
innovation in India, partially offset by a mid-single digit decrease
in developed regions due to competitive activity, primarily in North
America. Personal Health Care volume increased mid-single digits
primarily due to the addition of the Teva partnership, with organic
volume increasing low single digits behind market growth and Vicks
product innovation, partially offset by lower shipments of Prilosec
OTC in North America. Net earnings increased one percent to $537
million, consistent with sales growth, as reduced gross margins were
offset by lower SGA as a percentage of net sales.
-
Snacks and Pet Care net sales and organic sales increased three
percent to $824 million on a two percent increase in unit volume.
Pricing increased net sales by three percent. Mix reduced net sales by
two percent due to unfavorable product and geographic mix. Snacks
volume increased mid-single digits mainly due to increased
distribution and market growth in developing regions. Pet Care volume
decreased low single digits due to customer inventory adjustments and
market contraction. Net earnings decreased nine percent to $61 million
as operating margin contraction and a higher effective tax rate more
than offset net sales growth. Operating margin decreased primarily due
to a decline in gross margin, partially offset by a decrease in
overhead spending as a percentage of net sales. Gross margin decreased
behind an increase in commodities, partially offset by price increases
and manufacturing cost savings.
-
Fabric Care and Home Care net sales and organic sales increased five
percent to $6.6 billion behind six points of increased pricing. Mix
reduced net sales by one percent due to unfavorable product and
geographic mix. Unit volume was in line with the prior year period.
Volume increased high single digits in developing regions, offset by a
low single digit decrease in developed regions. Fabric Care volume was
in line with the prior year as a mid-single digit increase in
developing regions, driven by new innovation and market growth, was
offset by a mid-single digit decrease in developed regions due to
competitive activity and the impact of price increases taken in the
previous quarters. Home Care volume increased low single digits driven
by initiative activity and distribution expansion in developing
regions. Batteries volume decreased low single digits due to market
contraction and distribution losses in developed markets, partially
offset by market growth and distribution expansion in developing
regions. Net earnings declined five percent to $717 million as sales
growth was more than offset by operating margin contraction. Operating
margin declined primarily due to lower gross margin, as higher
commodity costs were only partially offset by price increases and
manufacturing cost savings.
-
Baby Care and Family Care net sales and organic sales increased six
percent to $4.2 billion driven by six points of increased pricing.
Unit volume was in line with the prior year period. Volume in
developing regions increased double digits, while volume in developed
regions decreased mid-single digits. Volume in Baby Care increased
mid-single digits behind market size growth, innovation across the
portfolio, and distribution expansion in developing regions, partially
offset by market contraction in developed regions. Volume in Family
Care decreased mid-single digits primarily due to consumer value
differences relative to competitive products in North America. Net
earnings increased three percent to $516 million as sales growth was
partially offset by lower operating margin. Operating margin
contracted mainly due to a lower gross margin, driven by higher
commodity costs, partially offset by price increases and manufacturing
cost savings.
Fiscal Year 2012 Guidance
Net sales are expected to increase three to four percent in fiscal 2012.
Organic sales are expected to increase four to five percent. Foreign
exchange is expected to reduce net sales by one percent for the year.
Pricing is expected to add four percent to sales while unfavorable
product and geographic mix is expected to reduce sales by one to two
percent. Diluted net earnings per share is expected to be in the range
of $3.85 to $4.08 and Core EPS in the range of $4.00 to $4.10, up one to
four percent versus a base period Core EPS of $3.95. The Company’s prior
guidance range for Core EPS was $4.15 to $4.33. The change in the Core
EPS range is primarily due to foreign exchange, which has negatively
impacted earnings per share by $0.15 to $0.18 since the estimates
established at the beginning of the fiscal year.
January – March 2012 Quarter Guidance
For the January – March quarter, net sales growth is estimated to be in
line with year ago to up two percent. Organic sales are expected to grow
three to five percent, with continued benefit from pricing. Foreign
exchange is expected to reduce net sales by three percent. Diluted net
earnings per share are expected to be in the range of $0.81 to $0.87,
with Core EPS in the range of $0.91 to $0.97, down five percent to up
one percent versus a base period Core EPS of $0.96. Third quarter net
earnings will continue to be negatively affected by higher commodity
costs versus prior year levels. In addition, the Company noted that it
expects the effective tax rate will be significantly higher than in the
comparison period, which will reduce Core EPS growth by approximately
seven percent.
Fiscal Year 2012 Second Half Perspective
PG provided additional perspective on the improved results expected in
the second half of the fiscal year. The Company said it expects net
sales growth to be in-line with year ago to up two percent. Organic
sales growth in the range of four percent to five percent driven
primarily by continued strong growth in developing markets. Foreign
exchange is expected to reduce net sales by three to four percent.
The Company added that it expects sequential improvement in core
operating profit in the third and fourth quarters as the benefits from
pricing increase and commodity cost comparisons continue to ease. PG
said it expects double-digit growth in core operating profit for the
second-half of the fiscal year.
Core earnings per share growth rates will be driven by the strong
operating profit growth, but will be partially offset by a significant
increase in the effective tax rate. The Company’s new guidance
translates to four percent to nine percent core EPS growth in the second
half of the fiscal year, which includes an approximate six percentage
point negative impact on core EPS growth from the higher tax rate.
Forward-Looking Statements
All statements, other than statements of historical fact included in
this release or presentation, are forward-looking statements, as that
term is defined in the Private Securities Litigation Reform Act of 1995.
Such statements are based on financial data, market assumptions and
business plans available only as of the time the statements are made,
which may become out of date or incomplete. We assume no obligation to
update any forward-looking statement as a result of new information,
future events or other factors. Forward-looking statements are
inherently uncertain, and investors must recognize that events could
differ significantly from our expectations. In addition to the risks and
uncertainties noted in this release or presentation, there are certain
factors that could cause actual results for any quarter or annual period
to differ materially from those anticipated by some of the statements
made. These include: (1) the ability to achieve business plans,
including growing existing sales and volume profitably despite high
levels of competitive activity and an increasingly volatile economic
environment, especially with respect to the product categories and
geographical markets (including developing markets) in which the Company
has chosen to focus; (2) the ability to successfully manage ongoing
acquisition, divestiture and joint venture activities to achieve the
cost and growth synergies in accordance with the stated goals of these
transactions without impacting the delivery of base business objectives;
(3) the ability to successfully manage ongoing organizational changes
designed to support our growth strategies, while successfully
identifying, developing and retaining key employees, especially in key
growth markets where the availability of skilled employees is limited;
(4) the ability to manage and maintain key customer relationships; (5)
the ability to maintain key manufacturing and supply sources (including
sole supplier and plant manufacturing sources); (6) the ability to
successfully manage regulatory, tax and legal requirements and matters
(including product liability, patent, intellectual property, and tax
policy), and to resolve pending matters within current estimates; (7)
the ability to resolve the pending competition law inquiries in Europe
within current estimates; (8) the ability to successfully implement,
achieve and sustain cost improvement plans in manufacturing and overhead
areas, including the Company’s outsourcing projects; (9) the ability to
successfully manage currency (including currency issues in certain
countries, such as Venezuela, China and India), debt, interest rate and
commodity cost exposures and significant credit or liquidity issues;
(10) the ability to manage continued global political and/or economic
uncertainty and disruptions, especially in the Company’s significant
geographical markets, due to terrorist and other hostile activities or
natural disasters (including the civil unrest in the Middle East and the
Japan earthquake and tsunami) and/or disruptions to credit markets
resulting from a global, regional or national credit crisis; (11) the
ability to successfully manage competitive factors, including prices,
promotional incentives and trade terms for products; (12) the ability to
obtain patents and respond to technological advances attained by
competitors and patents granted to competitors; (13) the ability to
successfully manage increases in the prices of raw materials used to
make the Company’s products; (14) the ability to develop effective
sales, advertising and marketing programs; (15) the ability to stay on
the leading edge of innovation, maintain a positive reputation on our
brands and ensure trademark protection; and (16) the ability to rely on
and maintain key information technology systems (including Company and
third-party systems) and the security over such systems and the data
contained therein. For additional information concerning factors that
could cause actual results to materially differ from those projected
herein, please refer to our most recent 10-K, 10-Q and 8-K reports.
About Procter Gamble
PG serves approximately 4.4 billion people around the world with its
brands. The Company has one of the strongest portfolios of trusted,
quality, leadership brands, including Pampers®, Tide®, Ariel®, Always®,
Whisper®, Pantene®, Mach3®, Bounty®, Dawn®, Fairy®, Gain®, Pringles®,
Charmin®, Downy®, Lenor®, Iams®, Crest®, Oral-B®, Duracell®, Olay®, Head
Shoulders®, Wella®, Gillette®, Braun®, Fusion®, Ace®, Febreze®, and
Ambi Pur®. The PG community includes operations in about 80 countries
worldwide. Please visit http://www.pg.com
for the latest news and in-depth information about PG and its brands.
# # #
The Procter Gamble Company
Exhibit 1: Non-GAAP Measures
In accordance with the SEC’s Regulation G, the following provides
definitions of the non-GAAP measures used in the earnings release and
the reconciliation to the most closely related GAAP measure.
Organic Sales Growth: Organic sales growth
is a non-GAAP measure of sales growth excluding the impacts of
acquisitions, divestitures and foreign exchange from year-over-year
comparisons. We believe this provides investors with a more complete
understanding of underlying sales trends by providing sales growth on a
consistent basis. Organic sales is also one of the measures used to
evaluate senior management and is a factor in determining their at-risk
compensation.
The reconciliation of reported sales growth to organic sales is as
follows:
OND 2011
Net
Sales
Growth
Foreign
Exchange
Impact
Acquisition/
Divestiture
Impact*
Organic
Sales
Growth
Beauty
1%
-1%
2%
2%
Grooming
1%
0%
1%
2%
Health Care
1%
0%
0%
1%
Snacks and Pet Care
3%
0%
0%
3%
Fabric Care and Home Care
5%
0%
0%
5%
Baby Care and Family Care
6%
0%
0%
6%
Total PG
4%
0%
0%
4%
Total PG
Net Sales
Growth
Foreign
Exchange
Impact
Acquisition/
Divestiture
Impact*
Organic
Sales
Growth
JFM 12 (estimate)
0% to 2%
3%
0%
3% to 5%
2H FY 2012 (estimate)
0% to 2%
4% to 3%
0%
4% to 5%
FY 2012 (estimate)
3% to 4%
1%
0%
4% to 5%
*Acquisition/Divestiture Impact includes rounding impacts necessary to
reconcile net sales to organic sales.
Core EPS: This is a measure of the
Company’s diluted net earnings per share from continuing operations
excluding current year impairment charges for goodwill and indefinite
lived intangible assets, current year charges related to incremental
restructuring charges due to increased focus on productivity and cost
savings, charges in both years related to the European legal matters and
a significant prior year settlement from U.S. tax litigation related to
the valuation of technology donations. We do not view these items to be
part of our sustainable results. We believe the Core EPS measure
provides an important perspective of underlying business trends and
results and provides a more comparable measure of year-on-year earnings
per share growth. Core EPS is also one of the measures used to evaluate
senior management and is a factor in determining their at-risk
compensation. The table below provides a reconciliation of diluted net
earnings per share to Core EPS:
OND 11
OND 10
Diluted Net Earnings Per Share
$0.57
$1.11
Impairment charges
$0.50
-
Charges for European legal matters
$0.02
$0.10
Settlement from U.S. tax litigation
-
($0.08)
Incremental restructuring
$0.01
-
Core EPS
$1.10
$1.13
Core EPS Growth
-3%
JFM 12 (Est.)
JFM 11
Diluted Net Earnings Per Share
$0.81 to $0.87
$0.96
Incremental Restructuring
$0.10
-
Core EPS
$0.91 to $0.97
$0.96
Core EPS Growth
-5% to 1%
Jan-Jun 2012 (Est.)
Jan-Jun 2011
Diluted Net Earnings Per Share
$2.25 to $2.48
$1.80
One-time gain from snacks divestiture
($0.55) to ($0.65)
-
Incremental restructuring
$0.17 to $0.14
-
Core EPS
$1.87 to $1.97
$1.80
Core EPS Growth
4% to 9%
FY 2012 (Est.)
FY 2011
Diluted Net Earnings Per Share
$3.85 to $4.08
$3.93
One-time gain from snacks divestiture
($0.55) to ($0.65)
-
Impairment charges
$0.50
-
Charges for European legal matters
$0.02
$0.10
Settlement from U.S. tax litigation
-
($0.08)
Incremental restructuring
$0.18 to $0.15
-
Core EPS
$4.00 to $4.10
$3.95
Core EPS Growth
1% to 4%
Note – All reconciling items are presented net of tax. Tax effects are
calculated consistent with the nature of the underlying transaction. The
charge for the significant settlement from U.S. tax litigation is tax
expense.
Core Operating Margin: This is a measure of
the Company’s operating margin adjusted for the current year impairment
charges for goodwill and indefinite lived intangible assets, current
year charges related to incremental restructuring charges due to
increased focus on productivity and cost savings, and charges in current
and prior year related to the European legal matters:
OND 11
OND 10
Operating Margin
12.4%
20.0%
Impairment charges
7.0%
-
Charges for European legal matters
0.3%
1.4%
Incremental restructuring
0.1%
-
Core Operating Margin
19.8%
21.4%
Basis point change
-160 bps
Core Operating Profit Growth: This is a
measure of the Company’s operating profit growth adjusted for the
current year impairment charges for current year charges related to
incremental restructuring charges due to increased focus on productivity
and cost savings:
Jan-Jun 2012
(Est.)
Operating Profit Growth
0% to 7%
Impairment charges
-
Charges for European legal matters
-
Incremental restructuring
10% to 8%
Rounding
-
Core Operating Profit Growth
10% to 15%
Free Cash Flow: Free cash flow is defined
as operating cash flow less capital spending. We view free cash flow as
an important measure because it is one factor in determining the amount
of cash available for dividends and discretionary investment. Free cash
flow is also one of the measures used to evaluate senior management and
is a factor in determining their at-risk compensation. The
reconciliation of free cash flow is provided below (amounts in millions):
Operating
Cash Flow
Capital
Spending
Free Cash Flow
Oct-Dec ‘11
$3,328
($947)
$2,381
THE PROCTER GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Consolidated Earnings Information
Three Months Ended December 31
Six Months Ended December 31
2011
2010
% CHG
2011
2010
% CHG
NET SALES
$
22,135
$
21,347
4
%
$
44,052
$
41,469
6
%
COST OF PRODUCTS SOLD
11,125
10,287
8
%
22,186
19,976
11
%
GROSS PROFIT
11,010
11,060
(0
)%
21,866
21,493
2
%
SELLING, GENERAL ADMINISTRATIVE EXPENSE
6,717
6,800
(1
)%
13,239
12,732
4
%
GOODWILL INDEFINITE LIVED INTANGIBLE IMPAIRMENT CHARGES
1,554
0
-
1,554
0
-
OPERATING INCOME
2,739
4,260
(36
)%
7,073
8,761
(19
)%
TOTAL INTEREST EXPENSE
201
209
(4
)%
408
417
(2
)%
OTHER NON-OPERATING INCOME/(EXPENSE), NET
170
39
336
%
171
67
155
%
EARNINGS BEFORE INCOME TAXES
2,708
4,090
(34
)%
6,836
8,411
(19
)%
INCOME TAXES
995
728
37
%
2,066
1,929
7
%
NET EARNINGS
1,713
3,362
(49
)%
4,770
6,482
(26
)%
LESS: NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
23
29
(21
)%
56
68
(18
)%
NET EARNINGS ATTRIBUTABLE TO PROCTER GAMBLE
1,690
3,333
(49
)%
4,714
6,414
(27
)%
EFFECTIVE TAX RATE
36.7
%
17.8
%
30.2
%
22.9
%
PER COMMON SHARE:
BASIC NET EARNINGS
$
0.59
$
1.17
(50
)%
$
1.67
$
2.24
(25
)%
DILUTED NET EARNINGS
$
0.57
$
1.11
(49
)%
$
1.60
$
2.13
(25
)%
DIVIDENDS
$
0.5250
$
0.4818
9
%
$
1.0500
$
0.9636
9
%
AVERAGE DILUTED SHARES OUTSTANDING
2,949.7
3,000.2
2,946.5
3,013.0
COMPARISONS AS A % OF NET SALES
Basis Pt
Chg
Basis Pt
Chg
GROSS MARGIN
49.7
%
51.8
%
(210
)
49.6
%
51.8
%
(220
)
SELLING, GENERAL ADMINISTRATIVE EXPENSE
30.3
%
31.8
%
(150
)
30.0
%
30.7
%
(70
)
GOODWILL INDEFINITE LIVED INTANGIBLE IMPAIRMENT CHARGES
7.0
%
0.0
%
700
3.5
%
0.0
%
350
OPERATING MARGIN
12.4
%
20.0
%
(760
)
16.1
%
21.1
%
(500
)
EARNINGS BEFORE INCOME TAXES
12.2
%
19.2
%
(700
)
15.5
%
20.3
%
(480
)
NET EARNINGS ATTRIBUTABLE TO PROCTER GAMBLE
7.6
%
15.6
%
(800
)
10.7
%
15.5
%
(480
)
THE PROCTER GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Cash Flows Information
Six Months Ended December 31
2011
2010
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$
2,768
$
2,879
OPERATING ACTIVITIES
NET EARNINGS
4,770
6,482
DEPRECIATION AND AMORTIZATION
1,456
1,400
SHARE-BASED COMPENSATION EXPENSE
168
180
DEFERRED INCOME TAXES
32
142
GAIN ON SALE OF BUSINESSES
(187
)
(3
)
GOODWILL AND INDEFINITE LIVED INTANGIBLES IMPAIRMENT CHARGES
1,554
0
CHANGES IN:
ACCOUNTS RECEIVABLE
(1,079
)
(931
)
INVENTORIES
(497
)
(779
)
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES
(1,009
)
(377
)
OTHER OPERATING ASSETS LIABILITIES
230
(671
)
OTHER
57
(67
)
TOTAL OPERATING ACTIVITIES
5,495
5,376
INVESTING ACTIVITIES
CAPITAL EXPENDITURES
(1,780
)
(1,256
)
PROCEEDS FROM ASSET SALES
238
22
ACQUISITIONS, NET OF CASH ACQUIRED
2
(435
)
CHANGE IN INVESTMENTS
71
128
TOTAL INVESTING ACTIVITIES
(1,469
)
(1,541
)
FINANCING ACTIVITIES
DIVIDENDS TO SHAREHOLDERS
(3,013
)
(2,834
)
CHANGE IN SHORT-TERM DEBT
2,416
948
ADDITIONS TO LONG-TERM DEBT
1,990
1,536
REDUCTIONS OF LONG-TERM DEBT
(2,514
)
(160
)
TREASURY STOCK PURCHASES
(1,764
)
(3,528
)
IMPACT OF STOCK OPTIONS AND OTHER
589
463
TOTAL FINANCING ACTIVITIES
(2,296
)
(3,575
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
(84
)
110
CHANGE IN CASH AND CASH EQUIVALENTS
1,646
370
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
4,414
$
3,249
THE PROCTER GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Balance Sheet Information
December 31, 2011
June 30, 2011
CASH AND CASH EQUIVALENTS
$
4,414
$
2,768
ACCOUNTS RECEIVABLE
6,905
6,275
TOTAL INVENTORIES
7,444
7,379
OTHER
4,888
5,548
TOTAL CURRENT ASSETS
23,651
21,970
NET PROPERTY, PLANT AND EQUIPMENT
20,372
21,293
NET GOODWILL AND OTHER INTANGIBLE ASSETS
85,632
90,182
OTHER NON-CURRENT ASSETS
4,656
4,909
TOTAL ASSETS
$
134,311
$
138,354
ACCOUNTS PAYABLE
$
6,735
$
8,022
ACCRUED AND OTHER LIABILITIES
8,939
9,290
DEBT DUE WITHIN ONE YEAR
14,118
9,981
TOTAL CURRENT LIABILITIES
29,792
27,293
LONG-TERM DEBT
19,270
22,033
OTHER
20,349
21,027
TOTAL LIABILITIES
69,411
70,353
TOTAL SHAREHOLDERS’ EQUITY
64,900
68,001
TOTAL LIABILITIES SHAREHOLDERS’ EQUITY
$
134,311
$
138,354
THE PROCTER GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Earnings Information
Three Months Ended December 31, 2011
Net Sales
% Change
Versus
Year Ago
Earnings Before
Income Taxes
% Change
Versus
Year Ago
Net Earnings
Attributable to
Procter Gamble
% Change
Versus
Year Ago
Beauty
$
5,353
1
%
$
1,014
-9
%
$
802
-8
%
Grooming
2,202
1
%
692
4
%
517
2
%
Health Care
3,183
1
%
784
1
%
537
1
%
Snacks and Pet Care
824
3
%
95
2
%
61
-9
%
Fabric Care and Home Care
6,605
5
%
1,151
-1
%
717
-5
%
Baby Care and Family Care
4,162
6
%
816
2
%
516
3
%
Corporate
(194
)
N/A
(1,844
)
N/A
(1,460
)
N/A
Total Company
22,135
4
%
2,708
-34
%
1,690
-49
%
Six Months Ended December 31, 2011
Net Sales
% Change
Versus
Year Ago
Earnings Before
Income Taxes
% Change
Versus
Year Ago
Net Earnings
Attributable to
Procter Gamble
% Change
Versus
Year Ago
Beauty
$
10,668
5
%
$
1,942
-9
%
$
1,485
-10
%
Grooming
4,370
6
%
1,331
6
%
1,003
5
%
Health Care
6,474
6
%
1,584
4
%
1,079
5
%
Snacks and Pet Care
1,600
6
%
185
9
%
123
2
%
Fabric Care and Home Care
13,286
5
%
2,414
-7
%
1,522
-10
%
Baby Care and Family Care
8,241
9
%
1,608
4
%
1,010
4
%
Corporate
(587
)
N/A
(2,228
)
N/A
(1,508
)
N/A
Total Company
44,052
6
%
6,836
-19
%
4,714
-27
%
Three Months Ended December 31, 2011
(Percent Change vs. Year Ago) *
Volume
With
Acquisitions/
Divestitures
Volume
Without
Acquisitions/
Divestitures
Foreign Exchange
Price
Mix/Other
Net Sales
Growth
Beauty
1
%
2
%
1
%
3
%
-4
%
1
%
Grooming
1
%
1
%
0
%
2
%
-2
%
1
%
Health Care
0
%
0
%
0
%
3
%
-2
%
1
%
Snacks and Pet Care
2
%
2
%
0
%
3
%
-2
%
3
%
Fabric Care and Home Care
0
%
0
%
0
%
6
%
-1
%
5
%
Baby Care and Family Care
0
%
0
%
0
%
6
%
0
%
6
%
Total Company
1
%
1
%
0
%
4
%
-1
%
4
%
Six Months Ended December 31, 2011
(Percent Change vs. Year Ago) *
Volume
With
Acquisitions/
Divestitures
Volume
Without
Acquisitions/
Divestitures
Foreign Exchange
Price
Mix/Other
Net Sales
Growth
Beauty
3
%
4
%
3
%
2
%
-3
%
5
%
Grooming
1
%
1
%
3
%
2
%
0
%
6
%
Health Care
2
%
1
%
3
%
3
%
-2
%
6
%
Snacks and Pet Care
2
%
2
%
3
%
2
%
-1
%
6
%
Fabric Care and Home Care
0
%
0
%
2
%
5
%
-2
%
5
%
Baby Care and Family Care
1
%
1
%
2
%
5
%
1
%
9
%
Total Company
1
%
1
%
3
%
4
%
-2
%
6
%
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