P&G Announces Second Quarter Earnings
Net Sales Unchanged; Organic Sales +2%; Diluted Net EPS $2.88, +157%;
Core EPS $1.08, +4%
Increases Organic Sales Growth Guidance for Fiscal Year
CINCINNATI–(BUSINESS WIRE)–The Procter & Gamble Company (NYSE:PG) reported second quarter fiscal
year 2017 net sales of $16.9 billion, unchanged versus the prior year.
Organic sales increased two percent. Organic sales and organic volume
increased in all five business segments. Diluted net earnings per share
were $2.88, an increase of 157% versus the prior year, including a gain
of $1.95 per share from the Beauty Brands divestiture to Coty. Core
earnings per share were $1.08, an increase of four percent versus the
prior year. Currency-neutral core EPS increased nine percent versus the
prior year.
Operating cash flow was $3.0 billion for the quarter. Adjusted free cash
flow productivity was 82%. The Company returned $1.8 billion of cash to
shareholders as dividends, repurchased $1.5 billion of common stock and
exchanged shares with a value of $9.4 billion in the Beauty Brands
transaction.
“We delivered good results in the second quarter in a difficult
operating environment,” said Chairman, President and Chief Executive
Officer David Taylor. “Stronger top-line performance in the first half
of the fiscal year is enabling us to increase our organic sales growth
outlook for the full year – another step towards the levels of balanced
top-line, bottom-line, and cash flow growth that will consistently put
P&G shareholder value creation among the best in our industry.”
October – December Quarter Discussion
Net sales in the second quarter of fiscal year 2017 were $16.9 billion,
unchanged versus prior year, including a negative two percent impact
from foreign exchange. Organic sales increased two percent driven by a
two percent increase in organic shipment volume. Pricing and mix had no
net impact on sales for the quarter. All-in volume increased one percent
including the impacts of minor brand divestitures and lost sales to
Venezuelan subsidiaries.
October – December 2016 |
Foreign |
Net |
Organic |
Organic |
||||||||||||||
Net Sales Drivers* |
Volume |
Exchange |
Price |
Mix |
Other** |
Sales |
Volume |
Sales |
||||||||||
Beauty | (1)% | (2)% | (1)% | 2% | 1% | (1)% | 2% | 3% | ||||||||||
Grooming | 3% | (2)% | 1% | (4)% | 1% | (1)% | 4% | 1% | ||||||||||
Health Care | 4% | (2)% | 1% | 2% | —% | 5% | 4% | 7% | ||||||||||
Fabric & Home Care | 1% | (2)% | (1)% | —% | 1% | (1)% | 2% | 1% | ||||||||||
Baby, Feminine & Family Care | 2% | (2)% | (1)% | (1)% | 1% | (1)% | 3% | 1% | ||||||||||
Total P&G | 1% | (2)% | —% | —% | 1% | —% | 2% | 2% |
* Net sales percentage changes are approximations based on quantitative
formulas that are consistently applied.
** Other includes the sales
mix impact from acquisitions/divestitures and rounding impacts necessary
to reconcile volume to net sales.
-
Beauty segment organic sales increased three percent versus year ago
behind growth in both Hair Care and Skin & Personal Care. Organic
sales increased in Skin & Personal Care due to the continued growth of
the super-premium SK-II skin care brand. Organic sales increased in
Hair Care due to innovation and marketing support on the Pantene and
Head & Shoulders brands. -
Grooming segment organic sales increased one percent due to
innovation-driven volume growth in both Shave Care and Appliances.
Organic sales increased low single digits globally in Shave Care as
higher volume outside the U.S. from innovation and increased marketing
support more than offset negative competitive impacts in the U.S.
Organic sales were up low single digits in Appliances driven by the
continued success of premium innovation across the top markets. -
Health Care segment organic sales increased seven percent behind
higher organic volume in both Oral Care and Personal Health Care.
Product innovation drove a high single digit increase in organic sales
in Oral Care, while Personal Health Care organic sales increased low
single digits primarily due to market growth. -
Fabric and Home Care segment organic sales increased one percent
versus year ago driven by higher volume from innovation and marketing
investments in Fabric Care along with increased pricing in Home Care.
Fabric Care and Home Care organic sales both increased low single
digits. -
Baby, Feminine and Family Care segment organic sales increased one
percent driven by organic volume growth in all three businesses. Baby
care volume increased behind product innovation, increased marketing
support and market growth. Feminine Care and Family Care organic
volume growth was driven by product innovation. Organic sales
increased low single digits in Feminine Care and mid-single digits in
Family Care while decreasing low single digits in Baby Care due to
increased promotional investments.
Diluted net earnings per share from continuing operations were $0.93, a
decrease of eight percent versus the base period. Diluted net earnings
per share were $2.88, an increase of 157% versus the prior year. Current
year results included a $1.95 per share gain from discontinued
operations from the Beauty Brands divestiture to Coty, which closed on
October 1, 2016, non-core restructuring charges of $0.03 per share and a
non-core charge for early debt retirement of $0.13 per share. Core
earnings per share, which exclude non-core restructuring charges, early
debt retirement fees and the results of discontinued operations, were
$1.08, an increase of four percent versus the prior year.
Currency-neutral core earnings per share increased nine percent for the
quarter.
Reported gross margin increased 80 basis points, including a 10 basis
point benefit from lower non-core restructuring charges. Core gross
margin improved 70 basis points, including 50 basis points of negative
foreign exchange impacts. On a currency-neutral basis, core gross margin
increased 120 basis points, driven by 210 basis points of productivity
cost savings partially offset by headwinds from unfavorable mix and
commodity cost increases.
Selling, general and administrative expense (SG&A) as a percent of sales
increased 60 basis points on a reported basis versus the prior year,
including a 10 basis point net benefit from a year-on-year decline in
non-core restructuring charges. Core SG&A as a percentage of sales
increased 70 basis points, including 10 basis points of unfavorable
foreign exchange impacts. On a currency-neutral basis, core SG&A was up
60 basis points versus the prior year as increased investments in
marketing activities were partially offset by productivity savings.
Reported operating profit margin increased 20 basis points. Core
operating profit margin was in-line with the prior year, including 60
basis points of foreign exchange impacts. On a currency-neutral basis,
core operating profit margin increased 60 basis points driven by
productivity cost savings of 230 basis points for the quarter.
Fiscal Year 2017 Guidance
P&G said it is raising its guidance for organic sales growth from
approximately two percent to a range of two to three percent for fiscal
2017. The Company now expects the combined headwinds of foreign exchange
and minor brand divestitures to reduce sales growth by two to three
percentage points. As a result, P&G estimates all-in sales to be in line
with the prior fiscal year.
The Company maintained its expectation for core earnings per share
growth of mid-single digits versus fiscal 2016 core EPS of $3.67. All-in
GAAP earnings per share are expected to increase 48% to 50% versus
fiscal year 2016 GAAP EPS of $3.69. The fiscal 2017 GAAP EPS estimate
includes approximately $0.12 per share of non-core restructuring costs
and $0.13 per share of charges related to early debt retirement that was
executed in the second fiscal quarter. Also included in GAAP EPS is the
$1.95 gain from the divestiture of 41 Beauty Brands to Coty in a
transaction that was completed on October 1, 2016.
Forward-Looking Statements
Certain statements in this release or presentation, other than purely
historical information, including estimates, projections, statements
relating to our business plans, objectives, and expected operating
results, and the assumptions upon which those statements are based, are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements generally are identified by the words
“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,”
“would,” “will be,” “will continue,” “will likely result,” and similar
expressions. Forward-looking statements are based on current
expectations and assumptions, which are subject to risks and
uncertainties that may cause results to differ materially from those
expressed or implied in the forward-looking statements. We undertake no
obligation to update or revise publicly any forward-looking statements,
whether because of new information, future events or otherwise.
Risks and uncertainties to which our forward-looking statements are
subject include, without limitation: (1) the ability to successfully
manage global financial risks, including foreign currency fluctuations,
currency exchange or pricing controls and localized volatility; (2) the
ability to successfully manage local, regional or global economic
volatility, including reduced market growth rates, and generate
sufficient income and cash flow to allow the Company to effect the
expected share repurchases and dividend payments; (3) the ability to
manage disruptions in credit markets or changes to our credit rating;
(4) the ability to maintain key manufacturing and supply arrangements
(including sole supplier and sole manufacturing plant arrangements) and
manage disruption of business due to factors outside of our control,
such as natural disasters and acts of war or terrorism; (5) the ability
to successfully manage cost fluctuations and pressures, including
commodity prices, raw materials, labor costs, energy costs and pension
and health care costs; (6) the ability to stay on the leading edge of
innovation, obtain necessary intellectual property protections and
successfully respond to technological advances attained by, and patents
granted to, competitors; (7) the ability to compete with our local and
global competitors in new and existing sales channels, including by
successfully responding to competitive factors such as prices,
promotional incentives and trade terms for products; (8) the ability to
manage and maintain key customer relationships; (9) the ability to
protect our reputation and brand equity by successfully managing real or
perceived issues, including concerns about safety, quality, ingredients,
efficacy or similar matters that may arise; (10) the ability to
successfully manage the financial, legal, reputational and operational
risk associated with third party relationships, such as our suppliers,
contractors and external business partners; (11) the ability to rely on
and maintain key information technology systems and networks (including
Company and third-party systems and networks) and maintain the security
and functionality of such systems and networks and the data contained
therein; (12) the ability to successfully manage regulatory and legal
requirements and matters (including, without limitation, those laws and
regulations involving product liability, intellectual property,
antitrust, privacy, tax, accounting standards and environmental) and to
resolve pending matters within current estimates; (13) the ability to
manage changes in applicable tax laws and regulations; (14) the ability
to successfully manage our portfolio optimization strategy, including
achieving and maintaining our intended tax treatment of the related
transactions, and our ongoing acquisition, divestiture and joint venture
activities, in each case to achieve the Company’s overall business
strategy and financial objectives, without impacting the delivery of
base business objectives; (15) the ability to successfully achieve
productivity improvements and cost savings and manage ongoing
organizational changes, while successfully identifying, developing and
retaining particularly key employees, especially in key growth markets
where the availability of skilled or experienced employees may be
limited; and (16) the ability to manage the uncertain implications of
the United Kingdom’s withdrawal from the European Union. For additional
information concerning factors that could cause actual results and
events to differ materially from those projected herein, please refer to
our most recent 10-K, 10-Q and 8-K reports.
About Procter & Gamble
P&G serves consumers around the world with one of the strongest
portfolios of trusted, quality, leadership brands, including Always®,
Ambi Pur®, Ariel®, Bounty®, Charmin®, Crest®, Dawn®, Downy®, Fairy®,
Febreze®, Gain®, Gillette®, Head & Shoulders®, Lenor®, Olay®, Oral-B®,
Pampers®, Pantene®, SK-II®, Tide®, Vicks®, and Whisper®. The P&G
community includes operations in approximately 70 countries worldwide.
Please visit http://www.pg.com for
the latest news and information about P&G and its brands.
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 | |||||||||||||||||||||
2016 | 2015 | % Chg | 2016 | 2015 | % Chg | |||||||||||||||||
NET SALES | $ | 16,856 | $ | 16,915 | — | % | $ | 33,374 | $ | 33,442 | — | % | ||||||||||
COST OF PRODUCTS SOLD | 8,298 | 8,460 | (2 | )% | 16,400 | 16,612 | (1 | )% | ||||||||||||||
GROSS PROFIT | 8,558 | 8,455 | 1 | % | 16,974 | 16,830 | 1 | % | ||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE | 4,683 | 4,602 | 2 | % | 9,328 | 9,209 | 1 | % | ||||||||||||||
OPERATING INCOME | 3,875 | 3,853 | 1 | % | 7,646 | 7,621 | — | % | ||||||||||||||
INTEREST EXPENSE | 122 | 143 | (15 | )% | 253 | 283 | (11 | )% | ||||||||||||||
INTEREST INCOME | 42 | 58 | (28 | )% | 77 | 102 | (25 | )% | ||||||||||||||
OTHER NON-OPERATING INCOME/(LOSS), NET | (539 | ) | 35 | N/A | (476 | ) | 17 | N/A | ||||||||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 3,256 | 3,803 | (14 | )% | 6,994 | 7,457 | (6 | )% | ||||||||||||||
INCOME TAXES ON CONTINUING OPERATIONS | 695 | 898 | (23 | )% | 1,558 | 1,775 | (12 | )% | ||||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 2,561 | 2,905 | (12 | )% | 5,436 | 5,682 | (4 | )% | ||||||||||||||
NET EARNINGS FROM DISCONTINUED OPERATIONS | 5,335 | 323 | 1,552 | % | 5,217 | 181 | 2,782 | % | ||||||||||||||
NET EARNINGS | 7,896 | 3,228 | 145 | % | 10,653 | 5,863 | 82 | % | ||||||||||||||
LESS: NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 21 | 22 | (5 | )% | 64 | 56 | 14 | % | ||||||||||||||
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE | $ | 7,875 | $ | 3,206 | 146 | % | $ | 10,589 | $ | 5,807 | 82 | % | ||||||||||
EFFECTIVE TAX RATE | 21.3 | % | 23.6 | % | 22.3 | % | 23.8 | % | ||||||||||||||
BASIC NET EARNINGS PER COMMON SHARE:* | ||||||||||||||||||||||
EARNINGS FROM CONTINUING OPERATIONS | $ | 0.96 | $ | 1.04 | (8 | )% | $ | 1.99 | $ | 2.02 | (1 | )% | ||||||||||
EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS | $ | 2.05 | $ | 0.12 | 1,608 | % | $ | 1.98 | $ | 0.07 | 2,729 | % | ||||||||||
BASIC NET EARNINGS PER COMMON SHARE | $ | 3.01 | $ | 1.16 | 159 | % | $ | 3.97 | $ | 2.09 | 90 | % | ||||||||||
DILUTED NET EARNINGS PER COMMON SHARE:* | ||||||||||||||||||||||
EARNINGS FROM CONTINUING OPERATIONS | $ | 0.93 | $ | 1.01 | (8 | )% | $ | 1.93 | $ | 1.97 | (2 | )% | ||||||||||
EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS | $ | 1.95 | $ | 0.11 | 1,673 | % | $ | 1.88 | $ | 0.06 | 3,033 | % | ||||||||||
DILUTED NET EARNINGS PER COMMON SHARE | $ | 2.88 | $ | 1.12 | 157 | % | $ | 3.81 | $ | 2.03 | 88 | % | ||||||||||
DIVIDENDS PER COMMON SHARE | $ | 0.6695 | $ | 0.6629 | $ | 1.3390 | $ | 1.3258 | ||||||||||||||
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 2,737.6 | 2,864.6 | 2,780.2 | 2,865.8 | ||||||||||||||||||
COMPARISONS AS A % OF NET SALES | Basis Pt Chg | Basis Pt Chg | ||||||||||||||||||||
GROSS MARGIN | 50.8% | 50.0% | 80 | 50.9% | 50.3% | 60 | ||||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE | 27.8% | 27.2% | 60 | 27.9% | 27.5% | 40 | ||||||||||||||||
OPERATING MARGIN | 23.0% | 22.8% | 20 | 22.9% | 22.8% | 10 | ||||||||||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 19.3% | 22.5% | (320) | 21.0% | 22.3% | (130) | ||||||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 15.2% | 17.2% | (200) | 16.3% | 17.0% | (70) | ||||||||||||||||
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE | 46.7% | 19.0% | 2,770 | 31.7% | 17.4% | 1,430 |
* Basic net earnings per common share and Diluted net earnings per
common share are calculated on Net earnings attributable to Procter &
Gamble.
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES | |||||||||||||||||||||
(Amounts in Millions) |
|||||||||||||||||||||
Consolidated Earnings Information |
|||||||||||||||||||||
Three Months Ended December 31, 2016 | |||||||||||||||||||||
% Change | Earnings/(Loss) from | % Change | Net Earnings/(Loss) | % Change | |||||||||||||||||
Versus Year | Continuing Operations | Versus Year | from Continuing | Versus Year | |||||||||||||||||
Net Sales | Ago | Before Income Taxes | Ago | Operations | Ago | ||||||||||||||||
Beauty | $ | 2,942 | (1 | )% | $ | 714 | (8 | )% | $ | 540 | (8 | )% | |||||||||
Grooming | 1,789 | (1 | )% | 614 | 6 | % | 469 | 6 | % | ||||||||||||
Health Care | 2,072 | 5 | % | 608 | 8 | % | 422 | 7 | % | ||||||||||||
Fabric & Home Care | 5,270 | (1 | )% | 1,125 | (4 | )% | 725 | (6 | )% | ||||||||||||
Baby, Feminine & Family Care | 4,645 | (1 | )% | 1,038 | — | % | 680 | — | % | ||||||||||||
Corporate | 138 | 24 | % | (843 | ) | N/A | (275 | ) | N/A | ||||||||||||
Total Company | $ | 16,856 | — | % | $ | 3,256 | (14 | )% | $ | 2,561 | (12 | )% |
Three Months Ended December 31, 2016 | ||||||||||||||
(Percent Change vs. Year Ago)* | ||||||||||||||
Volume with | Volume Excluding | |||||||||||||
Acquisitions & | Acquisitions & | Foreign | Net Sales | |||||||||||
Divestitures | Divestitures | Exchange | Price | Mix | Other** | Growth | ||||||||
Beauty | (1)% | 2% | (2)% | (1)% | 2% | 1% | (1)% | |||||||
Grooming | 3% | 4% | (2)% | 1% | (4)% | 1% | (1)% | |||||||
Health Care | 4% | 4% | (2)% | 1% | 2% | —% | 5% | |||||||
Fabric & Home Care | 1% | 2% | (2)% | (1)% | —% | 1% | (1)% | |||||||
Baby, Feminine & Family Care | 2% | 3% | (2)% | (1)% | (1)% | 1% | (1)% | |||||||
Total Company | 1% | 2% | (2)% | —% | —% | 1% | —% |
Six Months Ended December 31, 2016 | |||||||||||||||||||||
% Change | Earnings/(Loss) from | % Change | Net Earnings/(Loss) | % Change | |||||||||||||||||
Versus Year | Continuing Operations | Versus Year | from Continuing | Versus Year | |||||||||||||||||
Net Sales | Ago | Before Income Taxes | Ago | Operations | Ago | ||||||||||||||||
Beauty | $ | 5,938 | (1 | )% | $ | 1,497 | (6 | )% | $ | 1,132 | (6 | )% | |||||||||
Grooming | 3,447 | (1 | )% | 1,143 | 6 | % | 884 | 6 | % | ||||||||||||
Health Care | 3,933 | 4 | % | 1,104 | 9 | % | 742 | 4 | % | ||||||||||||
Fabric & Home Care | 10,572 | — | % | 2,254 | (2 | )% | 1,453 | (4 | )% | ||||||||||||
Baby, Feminine & Family Care | 9,240 | (1 | )% | 2,083 | (3 | )% | 1,377 | (4 | )% | ||||||||||||
Corporate | 244 | 12 | % | (1,087 | ) | N/A | (152 | ) | N/A | ||||||||||||
Total Company | $ | 33,374 | — | % | $ | 6,994 | (6 | )% | $ | 5,436 | (4 | )% |
Six Months Ended December 31, 2016 | ||||||||||||||
(Percent Change vs. Year Ago)* | ||||||||||||||
Volume with | Volume Excluding | |||||||||||||
Acquisitions & | Acquisitions & | Foreign | Net Sales | |||||||||||
Divestitures | Divestitures | Exchange | Price | Mix | Other** | Growth | ||||||||
Beauty | (2)% | 2% | (2)% | —% | 2% | 1% | (1)% | |||||||
Grooming | 2% | 3% | (2)% | 1% | (2)% | —% | (1)% | |||||||
Health Care | 4% | 5% | (2)% | 1% | 1% | —% | 4% | |||||||
Fabric & Home Care | 1% | 3% | (2)% | (1)% | 1% | 1% | —% | |||||||
Baby, Feminine & Family Care | 3% | 3% | (2)% | (1)% | —% | (1)% | (1)% | |||||||
Total Company | 1% | 2% | (2)% | —% | —% | 1% | —% |
* Net sales percentage changes are approximations based on quantitative
formulas that are consistently applied.
** Other includes the sales
mix impact from acquisitions/divestitures and rounding impacts necessary
to reconcile volume to net sales.
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES | |||||||||
(Amounts in Millions Except Per Share Amounts) |
|||||||||
Consolidated Statements of Cash Flows | |||||||||
Six Months Ended December 31 | |||||||||
2016 | 2015 | ||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | $ | 7,102 | $ | 6,836 | |||||
OPERATING ACTIVITIES | |||||||||
NET EARNINGS | 10,653 | 5,863 | |||||||
DEPRECIATION AND AMORTIZATION | 1,435 | 1,454 | |||||||
LOSS ON EARLY EXTINGUISHMENT OF DEBT |
543 | — | |||||||
SHARE-BASED COMPENSATION EXPENSE | 104 | 140 | |||||||
DEFERRED INCOME TAXES | (448 | ) | 140 | ||||||
GAIN ON SALE OF BUSINESSES | (5,343 | ) | (37 | ) | |||||
GOODWILL AND INTANGIBLE ASSET IMPAIRMENT CHARGES | — | 402 | |||||||
CHANGES IN: | |||||||||
ACCOUNTS RECEIVABLE | (595 | ) | (488 | ) | |||||
INVENTORIES | (247 | ) | (386 | ) | |||||
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES | (296 | ) | 322 | ||||||
OTHER OPERATING ASSETS & LIABILITIES | 152 | 374 | |||||||
OTHER | 67 | 234 | |||||||
TOTAL OPERATING ACTIVITIES | 6,025 | 8,018 | |||||||
INVESTING ACTIVITIES | |||||||||
CAPITAL EXPENDITURES | (1,429 | ) | (1,223 | ) | |||||
PROCEEDS FROM ASSET SALES | 280 | 80 | |||||||
ACQUISITIONS, NET OF CASH ACQUIRED | (16 | ) | (186 | ) | |||||
PURCHASES OF SHORT-TERM INVESTMENTS | (1,739 | ) | (762 | ) | |||||
PROCEEDS FROM SALES OF SHORT-TERM INVESTMENTS | 354 | 683 | |||||||
PRE-DIVESTITURE ADDITION OF RESTRICTED CASH RELATED TO THE BEAUTY |
(874 | ) | — | ||||||
CASH TRANSFERRED AT CLOSING TO THE DISCONTINUED BEAUTY BUSINESS | (475 | ) | — | ||||||
RELEASE OF RESTRICTED CASH UPON CLOSING OF THE BEAUTY BRANDS DIVESTITURE |
1,870 | — | |||||||
CHANGE IN OTHER INVESTMENTS | 8 | (31 | ) | ||||||
TOTAL INVESTING ACTIVITIES | (2,021 | ) | (1,439 | ) | |||||
FINANCING ACTIVITIES | |||||||||
DIVIDENDS TO SHAREHOLDERS | (3,637 | ) | (3,733 | ) | |||||
CHANGE IN SHORT-TERM DEBT | 2,715 | 2,020 | |||||||
ADDITIONS TO LONG-TERM DEBT | 2,641 | 1,721 | |||||||
REDUCTIONS OF LONG-TERM DEBT | (5,029 | ) | (1) | (2,239 | ) | ||||
TREASURY STOCK PURCHASES | (2,503 | ) | (2,503 | ) | |||||
IMPACT OF STOCK OPTIONS AND OTHER | 1,074 | 1,007 | |||||||
TOTAL FINANCING ACTIVITIES | (4,739 | ) | (3,727 | ) | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (316 | ) | (285 | ) | |||||
CHANGE IN CASH AND CASH EQUIVALENTS | (1,051 | ) | 2,567 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 6,051 | $ | 9,403 |
(1) Includes $543 of costs related to early extinguishment of
debt.
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES | |||||||
(Amounts in Millions Except Per Share Amounts) |
|||||||
Condensed Consolidated Balance Sheets | |||||||
December 31, 2016 | June 30, 2016 | ||||||
CASH AND CASH EQUIVALENTS | $ | 6,051 | $ | 7,102 | |||
AVAILABLE-FOR-SALE INVESTMENTS SECURITIES | 7,403 | 6,246 | |||||
ACCOUNTS RECEIVABLE | 4,729 | 4,373 | |||||
INVENTORIES | 4,787 | 4,716 | |||||
DEFERRED INCOME TAXES | — | 1,507 | |||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 2,602 | 2,653 | |||||
CURRENT ASSETS HELD FOR SALE | — | 7,185 | |||||
TOTAL CURRENT ASSETS | 25,572 | 33,782 | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 18,778 | 19,385 | |||||
GOODWILL | 43,458 | 44,350 | |||||
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET | 24,185 | 24,527 | |||||
OTHER NONCURRENT ASSETS | 5,040 | 5,092 | |||||
TOTAL ASSETS | $ | 117,033 | $ | 127,136 | |||
ACCOUNTS PAYABLE | $ | 8,300 | $ | 9,325 | |||
ACCRUED AND OTHER LIABILITIES | 7,584 | 7,449 | |||||
CURRENT LIABILITIES HELD FOR SALE | — | 2,343 | |||||
DEBT DUE WITHIN ONE YEAR | 13,007 | 11,653 | |||||
TOTAL CURRENT LIABILITIES | 28,891 | 30,770 | |||||
LONG-TERM DEBT | 16,460 | 18,945 | |||||
DEFERRED INCOME TAXES | 8,692 | 9,113 | |||||
OTHER NONCURRENT LIABILITIES | 9,246 | 10,325 | |||||
TOTAL LIABILITIES | 63,289 | 69,153 | |||||
TOTAL SHAREHOLDERS’ EQUITY | 53,744 | 57,983 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 117,033 | $ | 127,136 | |||
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 Procter & Gamble’s
January 20, 2017 earnings release and the reconciliation to the most
closely related GAAP measure. We believe that these measures provide
useful perspective on underlying business trends (i.e. trends excluding
non-recurring or unusual items) and results and provide a supplemental
measure of year-on-year results. The non-GAAP measures described below
are used by Management in making operating decisions, allocating
financial resources and for business strategy purposes. These measures
may be useful to investors as they provide supplemental information
about business performance and provide investors a view of our business
results through the eyes of management. These measures are also used to
evaluate senior management and are a factor in determining their at-risk
compensation. These non-GAAP measures are not intended to be considered
by the user in place of the related GAAP measure, but rather as
supplemental information to our business results. These non-GAAP
measures may not be the same as similar measures used by other companies
due to possible differences in method and in the items or events being
adjusted.
The Core earnings measures included in the following reconciliation
tables refer to the equivalent GAAP measures adjusted as applicable for
the following items:
Incremental restructuring: The Company has
had and continues to have an ongoing level of restructuring activities.
Such activities have resulted in ongoing annual restructuring related
charges of approximately $250 – $500 million before tax. Beginning in
2012 Procter & Gamble began a $10 billion strategic productivity and
cost savings initiative that includes incremental restructuring
activities. This results in incremental restructuring charges to
accelerate productivity efforts and cost savings. The adjustment to Core
earnings includes only the restructuring costs above what we believe are
the normal recurring level of restructuring costs.
Early debt extinguishment charges: During
the three months ended December 31, 2016, the Company recorded a charge
of $345 million after tax due to the early extinguishment of certain
long-term debt. This charge represents the difference between the
reacquisition price and the par value of the debt extinguished.
Contacts
P&G Media Contacts:
Damon
Jones, 513-983-0190
Jennifer Corso, 513-983-2570
or
P&G
Investor Relations Contact:
John Chevalier,
513-983-9974