The Procter & Gamble Company (NYSE:PG) reported first
quarter fiscal year 2015 core earnings per share of $1.07, an
increase of two percent versus the prior year. On a
currency-neutral basis, core earnings per share increased nine
percent. Diluted net earnings per share were $0.69, including
non-core items of $0.38 per share. Organic sales grew two percent
for the quarter. Reported net sales were $20.8 billion, unchanged
versus the prior year, including a negative two percentage point
impact from the combination of foreign exchange and minor
divestitures.
P&G generated operating cash flow of $3.6 billion and free
cash flow of $2.8 billion for the quarter. Adjusted free cash flow
productivity was 96%. P&G returned $4.2 billion in cash to
shareholders, including $1.8 billion in dividends and $2.4 billion
of common stock repurchases.
“P&G’s first quarter results were in-line with our
expectations, despite a very difficult operating environment,” said
Chairman, President, and Chief Executive Officer A.G. Lafley. “This
keeps us on-track to deliver our fiscal year commitments.”
“We continue to accelerate and increase productivity savings,
sharpen our strategies and strengthen our portfolio by focusing on
our biggest opportunities. The pet care divestiture and exit of the
battery business will allow us to further focus these efforts.”
July – September Quarter Discussion
Net sales were unchanged versus year ago at $20.8 billion in the
July – September quarter, including a negative two percentage point
impact from the combination of foreign exchange and minor
divestitures. Organic sales grew two percent, in line or higher
versus the prior year in all reporting segments. Organic volume was
unchanged versus the prior year in both developed and developing
regions. Pricing added one percentage point to sales growth, and
geographic and product mix was also positive.
July – Sept 2014
Net Sales Drivers
Volume
ForeignExchange
Price
Mix
Other*
NetSales
OrganicVolume
OrganicSales
Beauty, Hair and Personal Care -1% -1% 1% 0% 0% -1% -1% 0% Grooming
-2% -1% 4% -2% 0% -1% -2% 0% Health Care 4% 0% 1% 1% 0% 6% 4% 6%
Fabric Care and Home Care 1% -2% -1% 0% 0% -2% 1% 0% Baby, Feminine
and Family Care 0% -2% 2% 2% -1%
1% 0% 4%
Total P&G 0% -1%
1% 1% -1% 0% 0% 2%
*Other includes the sales mix impact of
acquisitions/divestitures and rounding impacts necessary to
reconcile volume to net sales
- Beauty, Hair, and Personal Care segment
organic sales were unchanged as pricing benefits from prior year
increases across all business units were offset by lower volume in
Prestige.
- Grooming segment organic sales were
unchanged as higher pricing and innovation on Blades & Razors
and higher volume in Appliances from innovation were offset by
lower Blades & Razors volume in developed regions.
- Health Care segment organic sales
increased six percent behind innovation-driven volume growth in
Oral Care and Personal Health Care along with higher pricing in
Oral Care.
- Fabric Care and Home Care segment
organic sales were unchanged as increased Fabric Care volume behind
initiatives was offset by a decline in Personal Power due to high
volume in the base period from new distribution.
- Baby, Feminine and Family Care segment
organic sales increased four percent behind pricing, primarily in
Baby Care, and positive sales mix, driven mainly by Feminine
Care.
Core earnings per share were $1.07, an increase of two percent
versus the prior year. Foreign exchange reduced core earnings by
$0.07 per share, resulting in a nine percent increase in core
earnings per share on a currency-neutral basis. Diluted net
earnings per share were $0.69, including non-core items of $0.38
per share. Non-core items include a $0.32 per share non-cash
goodwill and intangible asset impairment charge related to the
battery business. For a full reconciliation of non-core items,
please see Exhibit #1: Non-GAAP Measures.
Core operating profit margin decreased 20 basis points as a 20
basis point improvement in core gross margin was more than offset
by a 30 basis point increase in core SG&A as a percentage of
net sales. Reported operating profit margin decreased 570 basis
points primarily due to the impairment charges. Reported gross
margin was unchanged as manufacturing savings of 140 basis points
were offset by foreign exchange, higher commodity costs,
incremental restructuring charges and innovation and capacity
expansion investments. Reported SG&A as a percentage of sales
increased 90 basis points as productivity savings of 70 basis
points from overhead and 50 basis points of marketing efficiencies
were more than offset by foreign exchange impacts, including a
non-core charge for adjustments to remeasure certain balances in
Venezuela. Total productivity savings in cost of goods sold and
SG&A were 260 basis points.
Pet Care Divestiture
During the quarter, the Company completed plans to exit the Pet
Care business. P&G closed the divestiture of its pet business
in the Americas to Mars, Inc. in July. Mars then exercised their
option to purchase P&G’s pet business in Asia. In September,
P&G signed an agreement to divest its European pet business to
Spectrum Brands. All remaining elements of these transactions are
expected to close in calendar year 2015, pending regulatory
approvals.
Duracell Announcement
Consistent with its plans to focus and strengthen its brand and
category portfolio, P&G announced its intention today to exit
the Duracell personal power business by creating a stand-alone
Duracell company. P&G said its goals in the process of exiting
this business are to maximize value to P&G’s shareholders and
minimize earnings per share dilution.
P&G said it is exiting the battery business in two steps.
The first step was finalizing an agreement to sell its interest in
a China-based battery joint venture, which it accomplished in
late-August. Terms of this transaction were not disclosed.
The second step is the exit of the Duracell business. Although
no decision has been made on the form of the exit, P&G’s
current preference is a split-off of the Duracell business into a
stand-alone company.
In a split-off, P&G shareholders would be given the option
of exchanging some, none, or all of their P&G shares for shares
in the newly formed Duracell company. P&G’s outstanding share
count would be reduced by the number of P&G shares exchanged.
The exact exchange ratio would be set just prior to the completion
of the transaction, which P&G expects would occur in the second
half of calendar year 2015.
P&G said it would notify its shareholders when a final
decision is made regarding the form of the business separation. The
Company added that any alternative exit scenario – including a
spin-off, divestiture or other offer – that generates equal or
better value will be considered.
“We greatly appreciate the contributions of our Duracell
employees. Since we acquired the business in 2005 as part of
Gillette, Duracell has strengthened its position as the global
market leader in the battery category,” said Mr. Lafley. “It’s a
business with attractive operating profit margins and a history of
strong cash generation. I’m confident the business and its
employees will continue to thrive as its own company.”
The Company said it will continue to report results of the
Duracell business as continuing operations for the time being.
Goodwill and Intangible Impairment
During the quarter the Company took a non-cash charge of $932
million after-tax, or $0.32 per share, to adjust the carrying
values of goodwill and indefinite-lived intangible assets in its
Duracell battery business. The Company said it is writing down the
asset value of its battery business to be more reflective of the
value it will receive from the recently announced sale of its
interest in a China-based battery joint-venture.
Fiscal Year 2015 Guidance
P&G reiterated its organic sales growth and core earnings
per share growth guidance ranges for fiscal year 2015. P&G
added that the quarterly profile of earnings will be heavily
influenced by the variation of foreign exchange impacts from
period-to-period. The Company expects significant negative sales
and earnings impacts from foreign exchange in the October-December
2014 quarter.
The Company continues to expect organic sales growth in the
low-to-mid single digit range. Net sales growth is now expected to
be in-line to up low single digits versus the prior fiscal year,
including a negative two point impact from foreign exchange.
P&G maintained its outlook for core earnings per share
growth in the range of mid-single digits. All-in GAAP diluted net
earnings per share are now expected to be down two percent to down
five percent versus the prior year, including approximately $0.55
per share of non-core charges, primarily from $0.20 per share of
non-core restructuring charges and $0.32 of impairment charges.
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share
Amounts)
Selected Financial Information
GAAP CORE (NON-GAAP)* Three Months Ended September 30
Three Months Ended September 30
2014
2013
% Change
2014
2013
% Change
NET SALES $ 20,792 $ 20,830 - % $ 20,792 $ 20,830 - % COST
OF PRODUCTS SOLD 10,552 10,574 - % 10,459 10,512 (1 %) GROSS
PROFIT 10,240 10,256 - % 10,333 10,318 - % SELLING, GENERAL
& ADMINISTRATIVE EXPENSE 6,327 6,136 3 % 6,185 6,133 1 %
GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSET IMPAIRMENT CHARGES
973 - N/A - - N/A OPERATING INCOME 2,940 4,120 (29 %) 4,148
4,185 (1 %) DILUTED NET EPS FROM CONTINUING OPERATIONS $
0.68 $ 1.03 (34 %) $ 1.07 $ 1.05 2 % TAX RATE 29.0 % 23.7 %
22.6 % 23.6 %
COMPARISONS AS A
% OF NET SALES
Basis PtChg
Basis PtChg
GROSS MARGIN 49.2 % 49.2 % - 49.7 % 49.5 % 20 SELLING, GENERAL
& ADMINISTRATIVE EXPENSE 30.4 % 29.5 % 90 29.7 % 29.4 % 30
GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSET IMPAIRMENT CHARGES
4.7 % - % 470 - % - % N/A OPERATING MARGIN 14.1 % 19.8 % (570 )
19.9 % 20.1 % (20 )
CASH FLOW (THREE
MONTHS ENDED SEPTEMBER 30) - SOURCE/(USE)
2014
2013
OPERATING CASH FLOW 3,633 2,044 FREE CASH FLOW 2,823 1,319
DIVIDENDS (1,806 ) (1,708 ) SHARE REPURCHASE (2,378 ) (2,502 )
*Core excludes incremental restructuring
charges, impairments, and balance sheet remeasurement impact from
Venezuela.
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,” “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 expectation and assumptions, which are subject
to risks and uncertainties that may cause results to differ
materially from 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: (1) the ability to achieve business plans,
including growing existing sales and volume profitably and
maintaining and improving margins and market share, despite high
levels of competitive activity, an increasingly volatile economic
environment, lower than expected market growth rates, especially
with respect to the product categories and geographical markets
(including developing markets) in which the Company has chosen to
focus, and/or increasing competition from mid- and lower tier value
products in both developed and developing markets; (2) the ability
to successfully manage ongoing acquisition, divestiture and joint
venture activities to achieve the Company’s overall business
strategy, as well as cost and growth synergies in accordance with
the stated goals of these transactions, and without impacting the
delivery of base business objectives; (3) the ability to
successfully manage ongoing organizational changes and achieve
productivity improvements designed to support our growth
strategies, 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; (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, but not limited to,
product liability, patent, intellectual property, price controls,
import restrictions, environmental and tax policy) and to resolve
pending matters (including the pending competition law inquiries in
Europe) within current estimates; (7) the ability to successfully
manage the financial, legal, reputational and operational risk
associated with third party relationships, such as suppliers,
contractors and external business partners; (8) the ability to
successfully implement, achieve and sustain cost improvement plans
and efficiencies in manufacturing and overhead areas, including the
Company's outsourcing arrangements; (9) the ability to successfully
manage volatility in foreign exchange rates, as well as our debt
and currency exposure (especially in certain countries with
currency exchange, import authorization or pricing controls, such
as Venezuela, Argentina, China, India and Egypt); (10) the ability
to maintain our current credit rating and to manage fluctuations in
interest rate, increases in pension and healthcare expense, and any
significant credit or liquidity issues; (11) the ability to manage
continued global political and/or economic uncertainty and
disruptions, especially in the Company's significant geographical
markets, due to a wide variety of factors, including but not
limited to, terrorist and other hostile activities, natural
disasters and/or disruptions to credit markets, resulting from a
global, regional or national credit crisis; (12) the ability to
successfully manage competitive factors, including prices,
promotional incentives and trade terms for products; (13) the
ability to obtain patents and respond to technological advances
attained by competitors and patents granted to competitors; (14)
the ability to successfully manage increases in the prices of
commodities, raw materials and energy, including the ability to
offset these increases through pricing actions; (15) the ability to
develop effective sales, advertising and marketing programs; (16)
the ability to stay on the leading edge of innovation, maintain the
positive reputation of our brands and ensure trademark protection;
and (17) the ability to rely on and maintain key information
technology systems and networks (including Company and third-party
systems and networks), the security over such systems and networks,
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
P&G serves nearly five billion people around the world
with its brands. The Company has one of the strongest portfolios of
trusted, quality, leadership brands, including Always®, Ambi Pur®,
Ariel®, Bounty®, Charmin®, Crest®, Dawn®, Downy®, Duracell®,
Fairy®, Febreze®, Gain®, Gillette®, Head & Shoulders®, Lenor®,
Olay®, Oral-B®, Pampers®, Pantene®, SK-II®, Tide®, Vicks®, Wella®
and Whisper®. The P&G community includes operations in
approximately 70 countries worldwide. Please
visit http://www.pg.com for the latest news and in-depth
information about P&G 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:
JAS 2014
NetSalesGrowth
ForeignExchangeImpact
Acquisition/DivestitureImpact*
OrganicSalesGrowth
Beauty (1)% 1% 0% 0% Grooming (1)% 1% 0% 0% Health Care 6% 0% 0% 6%
Fabric Care and Home Care (2)% 2% 0% 0% Baby, Feminine and Family
Care 1%
2% 1% 4%
Total
P&G
0% 1% 1% 2%
Total
P&G
Net SalesGrowth
ForeignExchangeImpact
Acquisition/DivestitureImpact*
Organic Sales Growth FY 2015 (Estimate) Low single digit 2%
0% Low-to-mid single digit
*Acquisition/Divestiture Impact includes
volume and mix impacts of acquired and divested businesses, as well
as rounding impacts necessary to reconcile net sales to organic
sales.
Core EPS and Currency-neutral Core
EPS: Core EPS is a measure of the Company’s diluted net
earnings per share from continuing operations excluding charges in
both years for incremental restructuring due to increased focus on
productivity and cost savings, and charges in FY 2015 for balance
sheet remeasurement impacts from Venezuela and the impairment in
our Batteries business. 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.
Currency-neutral Core EPS is a measure of the Company’s Core EPS
excluding the impact of foreign exchange. We believe the
currency-neutral Core EPS measure provides a more comparable view
of year-on-year earnings per share growth.
The table below provides a reconciliation of diluted net
earnings per share to Core EPS and Core EPS to Currency-neutral
Core EPS:
JAS
14 JAS 13 Diluted Net Earnings Per
Share $ 0.69 $ 1.04 Earnings from
Discontinued Operations (0.01 ) (0.01 )
Diluted
Net Earnings Per Share from continuing operations 0.68
1.03 Incremental Restructuring 0.03 0.02 Venezuela Balance
Sheet Remeasurement 0.04 - Goodwill & Intangible Impairment
0.32 -
Core EPS $
1.07 $ 1.05 Percentage change vs. prior period
2 % Currency Impact to Earnings 0.07
Currency-neutral Core EPS $ 1.14
Percentage change vs. prior period 9 %
Note – All reconciling items are presented net of tax. Tax
effects are calculated consistent with the nature of the underlying
transaction.
Total
P&G
Diluted EPSGrowth
Impact of IncrementalNon-Core Charges to
EPSGrowth
Core EPS Growth FY 2015 (Estimate) -2% to -5%
Approximately 8% Mid-single digit
Core Operating Profit Margin: This
is a measure of the Company’s Operating Margin adjusted for charges
in both years for incremental restructuring due to increased focus
on productivity and cost savings, and charges in FY 2015 for
balance sheet remeasurement impacts from Venezuela and the
impairment in our Batteries business:
JAS
14 JAS 13 Operating Profit Margin
14.1 % 19.8 % Goodwill and Intangible
Impairment 4.7 % - Incremental Restructuring 0.4 % 0.3 % Venezuela
Balance Sheet Remeasurement 0.7 % -
Core Operating Profit
Margin 19.9 % 20.1 % Basis point
change -20
Core Gross Margin: This is a
measure of the Company’s gross margin adjusted for the charges in
both years for incremental restructuring due to increased focus on
productivity and cost savings:
JAS
14 JAS 13 Gross Margin 49.2
% 49.2 % Incremental Restructuring 0.4 % 0.3 %
Rounding 0.1 % -
Core Gross Margin 49.7
% 49.5 % Basis point change 20
Core Selling, General and Administrative
Expense (SG&A) as a percentage of sales: This is a
measure of the Company’s SG&A as a percentage of sales adjusted
for charges in both years for incremental restructuring due to
increased focus on productivity and cost savings, and charges in FY
2015 for balance sheet remeasurement impacts from Venezuela:
JAS
14 JAS 13 SG&A as a % of NOS
30.4 % 29.5 % Incremental Restructuring
- - Venezuela Balance Sheet Remeasurement -0.7 % - Rounding -
-0.1 %
Core SG&A as a % of NOS 29.7
% 29.4 % Basis point change 30
Core Tax Rate: This is a measure of
the Company’s tax rate adjusted for the current and prior year tax
impacts related to the impacts of incremental restructuring and
charges in FY 2015 for balance sheet remeasurement impacts from
Venezuela and the impairment in our Batteries business:
JAS
14 JAS 13 Effective Tax Rate
29.0 % 23.7 % Goodwill and Intangible
Impairment -6.4 % - Incremental Restructuring 0.1 % -0.1 %
Venezuela Balance Sheet Remeasurement -0.1 % -
Core Tax
Rate 22.6 % 23.6 %
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. The reconciliation of free cash flow is
provided below (amounts in millions):
OperatingCash Flow
Capital Spending
Free CashFlow
JAS 2014 $3,633
$810 $2,823
Adjusted free cash flow
productivity: Adjusted free cash flow productivity is
defined as the ratio of free cash flow to net earnings excluding
impairment charges. The Company’s long-term target is to generate
annual free cash flow at or above 90 percent of net earnings.
Adjusted free cash flow productivity is also a measure used to
evaluate senior management and is a factor in determining their
at-risk compensation. The reconciliation of adjusted free cash flow
productivity is provided below (amounts in millions):
Free CashFlow
NetEarnings
ImpairmentCharges
Net Earnings Excl.Impairment Charges
AdjustedFree CashProductivity
JAS 2014 $2,823 $2,020
$932 $2,952 96%
THE PROCTER & GAMBLE COMPANY AND
SUBSIDIARIES (Amounts in Millions Except Per Share Amounts)
Consolidated Earnings Information
Three Months Ended September 30
2014 2013 % CHG NET SALES $ 20,792 $
20,830 -% COST OF PRODUCTS SOLD 10,552 10,574
-%
GROSS PROFIT 10,240 10,256 -% SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE 6,327 6,136 3% GOODWILL AND INDEFINITE-LIVED
INTANGIBLE ASSET IMPAIRMENT CHARGES 973 -
N/A
OPERATING INCOME 2,940 4,120 (29%) INTEREST
EXPENSE 169 165 2% INTEREST INCOME 31 21 48% OTHER NON-OPERATING
INCOME, NET 21 5 320%
EARNINGS FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES 2,823 3,981 (29%)
INCOME TAXES ON CONTINUING OPERATIONS 820 942
(13%)
NET EARNINGS FROM CONTINUING OPERATIONS
2,003 3,039 (34%)
NET
EARNINGS FROM DISCONTINUED OPERATIONS 17
18 (6%)
NET EARNINGS 2,020 3,057 (34%) LESS:
NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 30
30 -%
NET EARNINGS ATTRIBUTABLE TO PROCTER
& GAMBLE 1,990 3,027 (34%)
EFFECTIVE TAX RATE 29.0 % 23.7 %
NET
EARNINGS PER COMMON SHARE: EARNINGS FROM CONTINUING OPERATIONS
$ 0.70 $ 1.08 (35%) EARNINGS FROM DISCONTINUED OPERATIONS $ 0.01 $
0.01 -% BASIC NET EARNINGS PER COMMON SHARE $ 0.71 $ 1.09 (35%)
DILUTED NET EARNINGS PER COMMON SHARE: EARNINGS FROM
CONTINUING OPERATIONS $ 0.68 $ 1.03 (34%) EARNINGS FROM
DISCONTINUED OPERATIONS $ 0.01 $ 0.01 -% DILUTED NET EARNINGS PER
COMMON SHARE $ 0.69 $ 1.04 (34%) DIVIDENDS PER COMMON SHARE
$ 0.644 $ 0.602 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,888.0 2,924.3
COMPARISONS AS A
% OF NET SALES
Basis
PointChange
GROSS MARGIN 49.2 % 49.2 % - SELLING, GENERAL AND ADMINISTRATIVE
EXPENSE 30.4 % 29.5 % 90 GOODWILL AND INTANGIBLES IMPAIRMENT
CHARGES 4.7 % - % 470 OPERATING MARGIN 14.1 % 19.8 % (570) EARNINGS
FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 13.6 % 19.1 % (550)
NET EARNINGS FROM CONTINUING OPERATIONS 9.6 % 14.6 % (500) NET
EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE 9.6 % 14.5 % (490)
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Earnings Information
Three Months Ended September 30,
2014 % Change Earnings From % Change
Net Earnings % Change Versus Continuing Operations
Versus From Continuing Versus Net Sales Year Ago
Before Income Taxes Year Ago Operations Year
Ago Beauty, Hair and Personal Care $ 4,857 -1 % $ 926 2 % $ 710 3 %
Grooming 1,941 -1 % 621 3 % 466 3 % Health Care 2,011 6 % 459 20 %
322 22 % Fabric Care and Home Care 6,538 -2 % 1,180 -9 % 783 -9 %
Baby, Feminine and Family Care 5,322 1 % 1,202 11 % 825 14 %
Corporate 123 -25 % (1,565 ) N/A
(1,103 ) N/A Total Company
20,792 - % 2,823 -29 %
2,003 -34 %
Three Months Ended September 30, 2014
(Percent Change vs. Year Ago)*
Volume withAcquisitions
&Divestitures
Volume excludingAcquisitions
&Divestitures
Foreign Exchange Price
Mix Other Net Sales Growth
Beauty, Hair and Personal Care -1% -1% -1% 1% 0% 0% -1% Grooming
-2% -2% -1% 4% -2% 0% -1% Health Care 4% 4% 0% 1% 1% 0% 6% Fabric
Care and Home Care 1% 1% -2% -1% 0% 0% -2% Baby, Feminine and
Family Care 0% 0% -2% 2% 2% -1%
1%
Total Company 0% 0%
-1% 1% 1% -1%
0% Sales percentage changes are approximations based
on quantitative formulas that are consistently applied. *Other
includes the sales mix impact of 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
Statement of Cash Flows Three Months
Ended September 30 2014 2013 CASH AND
CASH EQUIVALENTS, BEGINNING OF PERIOD $ 8,558 $ 5,947
OPERATING ACTIVITIES NET EARNINGS 2,020 3,057 DEPRECIATION
AND AMORTIZATION 794 771 SHARE BASED COMPENSATION EXPENSE 81 84
DEFERRED INCOME TAXES (15 ) (11 ) GAIN ON PURCHASE/SALE OF
BUSINESSES (234 ) (2 ) GOODWILL AND INDEFINITE LIVED INTANGIBLES
IMPAIRMENT CHARGES 973 0 CHANGES IN: ACCOUNTS RECEIVABLE (101 ) (3
) INVENTORIES (568 ) (452 ) ACCOUNTS PAYABLE, ACCRUED AND OTHER
LIABILITIES 812 (809 ) OTHER OPERATING ASSETS & LIABILITIES
(316 ) (731 ) OTHER 187 140
TOTAL
OPERATING ACTIVITIES 3,633 2,044
INVESTING ACTIVITIES CAPITAL EXPENDITURES (810 ) (725
) PROCEEDS FROM ASSET SALES 2,948 2 ACQUISITIONS, NET OF CASH
ACQUIRED (15 ) 1 PURCHASES OF AVAILABLE-FOR-SALE INVESTMENT
SECURITIES (1,342 ) 0 PROCEEDS FROM SALES/MATURITIES OF
AVAILABLE-FOR-SALE INVESTMENT SECURITIES 101 0 CHANGE IN OTHER
INVESTMENTS (440 ) (124 )
TOTAL INVESTING
ACTIVITIES 442 (846 )
FINANCING
ACTIVITIES DIVIDENDS TO SHAREHOLDERS (1,806 ) (1,708 ) CHANGE
IN SHORT-TERM DEBT 105 1,862 ADDITIONS TO LONG-TERM DEBT 0 1,073
REDUCTION OF LONG-TERM DEBT (1,902 ) 0 TREASURY STOCK PURCHASES
(2,378 ) (2,502 ) IMPACT OF STOCK OPTIONS AND OTHER 966
304
TOTAL FINANCING ACTIVITIES
(5,015 ) (971 )
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (132 ) (52 )
CHANGE IN CASH AND CASH EQUIVALENTS (1,072 )
175
CASH AND CASH EQUIVALENTS, END OF PERIOD $
7,486 $ 6,122
THE PROCTER
& GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions
Except Per Share Amounts)
Condensed Consolidated Balance
Sheet September 30, 2014 June 30, 2014
CASH AND CASH EQUIVALENTS $ 7,486 $ 8,558 AVAILABLE-FOR-SALE
INVESTMENTS SECURITIES 3,360 2,128 NET ACCOUNTS RECEIVABLE 6,197
6,386 TOTAL INVENTORIES 7,100 6,759 ASSETS HELD FOR SALE 134 2,849
OTHER 4,830 4,937
TOTAL CURRENT ASSETS 29,107
31,617 NET PROPERTY, PLANT AND EQUIPMENT, NET 21,799 22,304
NET GOODWILL AND OTHER INTANGIBLE ASSETS 81,571 84,547 OTHER
NON-CURRENT ASSETS 5,706 5,798
TOTAL ASSETS $
138,183 $ 144,266 ACCOUNTS PAYABLE 8,280 8,461
ACCRUED EXPENSES AND OTHER LIABILITIES 9,554 8,999 LIABILITIES HELD
FOR SALE 9 660 DEBT DUE WITHIN ONE YEAR 14,228 15,606
TOTAL CURRENT LIABILITIES 32,071 33,726 LONG-TERM
DEBT 19,004 19,811 OTHER 20,279 20,753
TOTAL
LIABILITIES 71,354 74,290
TOTAL
SHAREHOLDERS' EQUITY 66,829 69,976
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 138,183 $
144,266
P&G Media
Contacts:Paul Fox, 513-983-3465Jennifer Corso,
513-983-2570orP&G Investor Relations
Contact:John Chevalier, 513-983-9974
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