-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, mJbu7NcQZB4D3oCUVSPya5fw/BjtEw34Q4SqEh0My0gFvPQ2KCbWbG8LSzulqfXO Ov/VmrBrGKdWlrO2Bt2OLQ== 0000080424-94-000012.txt : 19940520 0000080424-94-000012.hdr.sgml : 19940520 ACCESSION NUMBER: 0000080424-94-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROCTER & GAMBLE CO CENTRAL INDEX KEY: 0000080424 STANDARD INDUSTRIAL CLASSIFICATION: 2840 IRS NUMBER: 310411980 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00434 FILM NUMBER: 94528248 BUSINESS ADDRESS: STREET 1: ONE PROCTER & GAMBLE PLZ CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5139831100 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1994 Commission file number 1-434 THE PROCTER & GAMBLE COMPANY (Exact name of registrant as specified in its charter) Ohio 31-0411980 (State of Incorporation) (I.R.S. Employer Identification No.) One Procter & Gamble Plaza, Cincinnati, Ohio 45202 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (513) 983-1100 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . There were 683,912,211 shares of Common Stock outstanding as of April 22, 1994. -1- PART I. FINANCIAL INFORMATION THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS Millions of Dollars Except Per Share Amounts
Three Months Ended Nine Months Ended March 31 March 31 1994 1993 1994 1993 ----- ----- ----- ----- NET SALES $7,441 $7,350 $22,793 $23,068 Cost of products sold 4,208 4,348 12,830 13,263 Marketing, administrative, and other operating expenses 2,310 2,235 6,932 7,101 Provision for restructuring -- -- -- 303 ------ ------ ------- ------- OPERATING INCOME 923 767 3,031 2,401 Interest expense 119 130 367 402 Other income/(expense), net (78)* 110 121* 287 ------ ------ ------- ------- EARNINGS BEFORE INCOME TAXES & PRIOR YEARS' EFFECT OF ACCOUNTING CHANGES 726 747 2,785 2,286 Income taxes 244 245 980 798 ------ ------ ------- ------- NET EARNINGS BEFORE PRIOR YEARS' EFFECT OF ACCOUNTING CHANGES 482 502 1,805 1,488 Prior years' effect of accounting changes, net of tax -- -- -- (925) ------ ------ ------- ------- NET EARNINGS $ 482 $ 502 $ 1,805 $ 563 ====== ====== ======= ======= PER COMMON SHARE: Net earnings before prior years' effect of accounting changes $ .66 $ .70 $ 2.53 $ 2.08 Prior years' effect of accounting changes, net of tax -- -- -- (1.36) ------ ------ ------- ------ Net earnings $ .66 $ .70 $ 2.53 $ .72 Net earnings assuming full dilution $ .64 $ .66 $ 2.38 $ .71 Dividends per Common Share $ .31 $ .275 $ .93 $ .825 AVERAGE COMMON SHARES OUTSTANDING (in millions) 682.7 680.0 * Includes $157 million ($102 million after-tax) charge for the close-out of two interest rate swaps. NOTE: 1993 has been restated to include prior years' effect of two accounting changes amounting to $(925) and the then current year's effects of $(14) for the third quarter and $(49) for the nine months.
-2- THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET Millions of Dollars
March 31 June 30 ASSETS 1994 1993 -------- ------- CURRENT ASSETS Cash and cash equivalents $ 2,424 $ 2,322 Accounts receivable, less allowance for doubtful accounts 3,238 3,111 Inventories Raw materials and supplies 1,087 1,154 Work in process 332 196 Finished products 1,536 1,553 Deferred income taxes 634 740 Prepaid expenses and other current assets 1,261 899 ------- ------- 10,512 9,975 ------- ------- PROPERTY, PLANT, AND EQUIPMENT 15,517 14,877 LESS ACCUMULATED DEPRECIATION 5,811 5,392 ------- ------- 9,706 9,485 ------- ------- GOODWILL AND OTHER INTANGIBLE ASSETS 3,782 3,762 OTHER ASSETS 1,718 1,713 ------- ------- TOTAL $25,718 $24,935 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accruals $ 6,274 $ 6,475 Debt due within one year 1,812 1,812 ------- ------- 8,086 8,287 ------- ------- LONG-TERM DEBT 5,139 5,174 OTHER LIABILITIES 3,733 3,850 DEFERRED INCOME TAXES 179 183 SHAREHOLDERS' EQUITY Preferred stock 1,949 1,969 Common stock-shares outstanding -Mar. 31 683,813,511 684 682 -June 30 681,754,226 Additional paid-in capital 541 477 Currency translation adjustments (139) (99) Reserve for ESOP debt retirement (1,787) (1,836) Retained earnings 7,333 6,248 ------- ------- 8,581 7,441 ------- ------- TOTAL $25,718 $24,935 ======= ======= June 30, 1993 amounts were derived from audited Financial Statements.
-3- THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Millions of Dollars
Nine Months Ended March 31 1994 1993 Cash and Cash Equivalents, beginning of year $2,322 $1,776 ------ ------ OPERATING ACTIVITIES Net earnings before prior years' effect of accounting changes 1,805 1,488 Provision for Restructuring -- 303 Depreciation, depletion and amortization 842 819 Deferred income taxes 115 (65) Change in accounts receivable (150) 54 Change in inventories (71) 40 Decrease in payables and accrued liabilities (186) (524) Change in Other Liabilities (116) 55 Other 81 8 ------ ------ 2,320 2,178 ------ ------ INVESTING ACTIVITIES Capital expenditures (1,189) (1,292) Proceeds from asset sales and retirements 52 723 Acquisitions (228) (106) Marketable Securities (130) -- ------ ------ (1,495) (675) ------ ------ FINANCING ACTIVITIES Dividends to shareholders (711) (634) Additions to short-term debt 160 376 Additions to long-term debt 419 719 Reduction of long-term debt (583) (912) Proceeds from Stock Options 37 62 Purchase of treasury shares (9) (49) ------ ------ (687) (438) EFFECT OF EXCHANGE RATES ON CASH AND ------ ------ CASH EQUIVALENTS (36) (99) ------ ------ INCREASE IN CASH AND CASH EQUIVALENTS 102 966 ------ ------ Cash and Cash Equivalents, end of period $2,424 $2,742 ====== ====== SUPPLEMENTAL DISCLOSURE Non-cash transactions Liabilities assumed in acquisitions $ 34 $ 61 Reduction in employee stock ownership plan debt, guaranteed by the Company $ 49 $ 46 Conversion of preferred to common stock 20 10 Note: 1993 has been restated for retroactive adoption of accounting change related to postretirement benefits and income tax accounting. The interim financial statements are unaudited, but in the opinion of the Company include all adjustments, consisting only of normal recurring items, necessary for a fair presentation of the data.
-4- MANAGEMENT'S DISCUSSION AND ANALYSIS Net earnings for the January-March quarter were $482 million, including a onetime charge of $102 million for the interest rate swaps announced in April. Excluding this charge, earnings increased 16% over earnings from the same period last year. Earnings per share excluding this onetime item were $.81, also up 16% from last year. The earnings improvement was largely due to lower costs and a 6% increase in worldwide unit volume. The $102 million after-tax charge was to close out the written option portion of two leveraged interest rate swaps, thus eliminating future market volatility. A comprehensive review of all financial derivative contracts has been performed, and all outstanding derivative contracts are within our overall operating and financing policies. Based on this review, certain other derivative instruments are now being carried at market value for accounting purposes. The effect of this reclassification was not material to the results of the quarter. Net sales for January-March were up 1% from the same period last year. Sales were adversely affected by exchange rates and would have been up 3% at constant rates. For the July-March period, net earnings were $1,907 million excluding the $102 million charge for the interest rate swaps. This represents a 13% increase from $1,688 million in the year ago period, excluding the prior years' effect of accounting changes and a restructuring provision. Comparable earnings per share were $2.68 per share, up 13% from $2.37 per share a year ago. Net sales for the first nine months of the fiscal year decreased 1% from the same period in the previous year. Excluding the impact of exchange rates, net sales would have been up 3% from last year. This was a strong quarter for the Company. Pre-tax operating profit was up 20% versus January-March a year ago. This improvement reflects the benefit of cost reduction programs, along with solid unit volume gains in the U.S. and continued double-digit volume growth in International operations. -5- PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (11) Computation of Earnings Per Share (12) Computation of Ratio of Earnings to Fixed Charges (b) No reports on Form 8-K have been filed during the quarter ended March 31, 1994. Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. THE PROCTER & GAMBLE COMPANY /s/E. H. EATON - - ------------------------------ E. H. Eaton Vice President and Comptroller (Principal Accounting Officer) Date: May 12, 1994 -6- EXHIBIT INDEX Exhibit No. Page No. (11) Computation of Earnings per Share 8 (12) Computation of Ratio of Earnings to Fixed Charges 9 -7- EX-11 2 EXHIBIT (11) THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES ============================================= Computation of Earnings Per Share --------------------------------------------- Dollars and Share Amounts in Millions
Three Months Ended Nine Months Ended March 31 March 31 ------------------ ----------------- NET EARNINGS PER SHARE 1994 1993 1994 1993 - - ---------------------- ------ ------ ------ ------ Net Earnings $ 482 $ 502 $1,805 $ 563 Deduct preferred stock dividends 26 24 76 73 ------ ------ ------ ------ Net Earnings Applicable to Common Stock 456 478 1,729 490 - - --------------------------------------- ====== ====== ====== ====== Average number of common shares outstanding 682.7 680.0 682.7 680.0 Per Share - - --------- Net earnings before prior years' effect of accounting changes $ .66 $ .70 $ 2.53 $ 2.08 Prior years' effect of accounting changes -- -- -- (1.36) ------ ------ ------ ------ Net Earnings per share $ .66 $ .70 $ 2.53 $ .72 ====== ====== ====== ====== NET EARNINGS PER SHARE ASSUMING FULL DILUTION - - ------------------------------- Net Earnings $ 482 $ 502 $1,805 $ 563 Deduct differential -- preferred vs. common dividends 13 14 39 43 ------ ------ ------ ------ Net Earnings/(Loss) Applicable to Common Stock $ 469 $ 488 $1,766 $ 520 - - ---------------------------------------------- ====== ====== ====== ====== Average number of common shares outstanding 682.7 680.0 682.7 680.0 Add potential effect of: Exercise of options 6.1 7.1 6.1 7.1 Conversion of preferred stock 54.1 54.8 54.1 54.8 ------ ------ ------ ------ Average number of common shares outstanding, assuming full dilution 742.9 741.9 742.9 741.9 ====== ====== ====== ====== Per Share Assuming full dilution - - ----------------------------------------- Net earnings before prior years' effect of accounting changes $ .64 $ .66 $ 2.38 $ 1.95 Prior years' effect of accounting changes -- -- -- (1.24) ------ ------ ------ ------ Net Earnings $ .64 $ .66 $ 2.38 $ .71 ====== ====== ====== ====== NOTE: 1993 has been restated to reflect the retroactive adoption of accounting changes related to postretirement benefits and income tax accounting.
-8- EX-12 3 EXHIBIT (12) THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES ============================================= COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES ------------------------------------------------- Millions of Dollars
Nine Months Years Ended June 30 Ended Mar. 31 -------------------------------------- --------------- 1989 1990 1991 1992 1993 1993 1994 ------ ------ ------ ------ ------ ------ ------ EARNINGS AS DEFINED - - ------------------- Earnings from operations before income taxes after eliminating undistributed earnings of 20% to 50% owned affiliates $1,929 $2,401 $2,652 $2,870 $ 294 $2,272 $2,761 Fixed charges excluding capitalized interest 425 480 435 584 631 462 430 ------ ------ ------ ------ ------ ------ ------ TOTAL EARNINGS, AS DEFINED $2,354 $2,881 $3,087 $3,454 $ 925 $2,734 $3,191 ====== ====== ====== ====== ====== ====== ====== FIXED CHARGES, AS DEFINED - - ------------------------- Interest expense $ 391 $ 442 $ 395 $ 510 $ 552 $ 402 $ 367 1/3 of rental expense 34 38 40 74 79 60 63 ------ ------ ------ ------ ------ ------ ------ 425 480 435 584 631 462 430 Capitalized interest 7 3 17 25 25 18 15 ------ ------ ------ ------ ------ ------ ------ TOTAL FIXED CHARGES, AS DEFINED $ 432 $ 483 $ 452 $ 609 $ 656 $ 480 $ 445 ====== ====== ====== ====== ====== ====== ====== RATIO OF EARNINGS TO FIXED CHARGES 5.4 6.0 6.8 5.7 1.4 5.7 7.2 NOTE: The nine month period ended March 31, 1993 has been restated to reflect the retroactive adoption of accounting change related to postretirement benefits.
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