Date of Report (Date of earliest event reported) | August 2, 2016 |
THE PROCTER & GAMBLE COMPANY |
(Exact name of registrant as specified in its charter) |
Ohio | 1-434 | 31-0411980 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
One Procter & Gamble Plaza, Cincinnati, Ohio | 45202 | |
(Address of principal executive offices) | Zip Code |
(513) 983-1100 | 45202 | |
(Registrant's telephone number, including area code) | Zip Code |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
On August 2, 2016, The Procter & Gamble Company (the "Company") issued a news release with respect to earnings for the quarter and fiscal year ended June 30, 2016. The Company is furnishing this 8-K pursuant to Item 2.02, "Results of Operations and Financial Condition." |
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
Exhibit Number | Description |
99.1 | News Release by The Procter & Gamble Company dated August 2, 2016. |
THE PROCTER & GAMBLE COMPANY | |
BY: | /s/ SUSAN S. WHALEY |
Susan S. Whaley, Assistant Secretary | |
August 2, 2016 |
News Release | The Procter & Gamble Company |
One P&G Plaza | |
Cincinnati, OH 45202 |
P&G ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2016 RESULTS Q4’16: Net Sales -3%; Organic Sales +2%; Diluted Net EPS $0.69, +283%; Core EPS $0.79, -15% FY’16: Net Sales -8%; Organic Sales +1%; Diluted Net EPS $3.69, +51%; Core EPS $3.67, -2% |
April - June 2016 Net Sales Drivers* | Volume | Foreign Exchange | Price | Mix | Other** | Net Sales | Organic Volume | Organic Sales |
Beauty | (3)% | (3)% | 1% | —% | —% | (5)% | 1% | 1% |
Grooming | 2% | (4)% | 4% | —% | (1)% | 1% | 2% | 7% |
Health Care | 5% | (2)% | 2% | 1% | —% | 6% | 5% | 8% |
Fabric & Home Care | —% | (2)% | (1)% | (1)% | —% | (4)% | 2% | 1% |
Baby, Feminine & Family Care | 1% | (3)% | (2)% | —% | —% | (4)% | 2% | 1% |
Total P&G | —% | (3)% | —% | —% | —% | (3)% | 2% | 2% |
• | Beauty segment organic sales grew one percent versus the prior year driven by pricing benefits and higher organic volume. Organic sales increased in Skin and Personal Care driven by growth of the super-premium SK-II skin care brand, partially offset by lower sales of Olay. Hair Care organic sales were unchanged as innovation-driven growth on Pantene and Head & Shoulders was offset by declines in other brands from competitive activity. |
• | Grooming segment organic sales increased seven percent driven by higher pricing and volume. Sales growth was strong in developing markets driven by Fusion FlexBall innovation expansion and higher pricing while in developed markets sales growth behind the Fusion ProShield launch was offset by competitive activity in North America. Organic sales increased on Braun behind innovation-driven volume increases. |
• | Health Care segment organic sales increased eight percent. Organic sales in Oral Care were up versus the prior year driven by increased marketing, strong innovation results and increased pricing. Personal Health Care organic sales increased due to a late cough and cold season and due to higher pricing mainly in developing markets. |
• | Fabric & Home Care segment organic sales increased one percent due to an increase in organic volume. Fabric Care organic sales were unchanged as increased organic volume from premium product innovation and increased marketing support was offset by pricing investments. Home Care sales increased primarily due to strong innovation-driven growth in the Dish Care business. |
• | Baby, Feminine & Family Care segment organic sales increased one percent versus year ago. Baby Care and Feminine Care organic sales both increased behind innovation-driven volume growth. Family Care organic sales decreased as volume growth in the U.S. was more than offset by pricing investments and a decline in Mexico from discontinuation of certain product lines. |
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Consolidated Earnings Information | |||||||||||||||||||||
Three Months Ended June 30 | Twelve Months Ended June 30 | ||||||||||||||||||||
2016 | 2015 | % Chg | 2016 | 2015 | % Chg | ||||||||||||||||
NET SALES | $ | 16,102 | $ | 16,553 | (3 | )% | $ | 65,299 | $ | 70,749 | (8 | )% | |||||||||
COST OF PRODUCTS SOLD | 8,382 | 8,837 | (5 | )% | 32,909 | 37,056 | (11 | )% | |||||||||||||
GROSS PROFIT | 7,720 | 7,716 | — | % | 32,390 | 33,693 | (4 | )% | |||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE | 5,218 | 4,876 | 7 | % | 18,949 | 20,616 | (8 | )% | |||||||||||||
VENEZUELA DECONSOLIDATION CHARGE | — | 2,028 | — | 2,028 | |||||||||||||||||
OPERATING INCOME | 2,502 | 812 | 208 | % | 13,441 | 11,049 | 22 | % | |||||||||||||
INTEREST EXPENSE | 150 | 148 | 1 | % | 579 | 626 | (8 | )% | |||||||||||||
INTEREST INCOME | 47 | 46 | 2 | % | 182 | 149 | 22 | % | |||||||||||||
OTHER NON-OPERATING INCOME, NET | 287 | 355 | (19 | )% | 325 | 440 | (26 | )% | |||||||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 2,686 | 1,065 | 152 | % | 13,369 | 11,012 | 21 | % | |||||||||||||
INCOME TAXES ON CONTINUING OPERATIONS | 678 | 569 | 19 | % | 3,342 | 2,725 | 23 | % | |||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 2,008 | 496 | 305 | % | 10,027 | 8,287 | 21 | % | |||||||||||||
NET EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS | (50 | ) | 42 | N/A | 577 | (1,143 | ) | N/A | |||||||||||||
NET EARNINGS | 1,958 | 538 | 264 | % | 10,604 | 7,144 | 48 | % | |||||||||||||
LESS: NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 7 | 17 | (59 | )% | 96 | 108 | (11 | )% | |||||||||||||
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE | $ | 1,951 | $ | 521 | 274 | % | $ | 10,508 | $ | 7,036 | 49 | % | |||||||||
EFFECTIVE TAX RATE | 25.2 | % | 53.4 | % | 25.0 | % | 24.7 | % | |||||||||||||
BASIC NET EARNINGS PER COMMON SHARE*: | |||||||||||||||||||||
EARNINGS FROM CONTINUING OPERATIONS | $ | 0.73 | $ | 0.15 | 387 | % | $ | 3.59 | $ | 2.92 | 23 | % | |||||||||
EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS | $ | (0.02 | ) | $ | 0.02 | N/A | $ | 0.21 | $ | (0.42 | ) | N/A | |||||||||
BASIC NET EARNINGS PER COMMON SHARE | $ | 0.71 | $ | 0.17 | 318 | % | $ | 3.80 | $ | 2.50 | 52 | % | |||||||||
DILUTED NET EARNINGS PER COMMON SHARE*: | |||||||||||||||||||||
EARNINGS FROM CONTINUING OPERATIONS | $ | 0.71 | $ | 0.17 | 318 | % | $ | 3.49 | $ | 2.84 | 23 | % | |||||||||
EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS | $ | (0.02 | ) | $ | 0.01 | N/A | $ | 0.20 | $ | (0.40 | ) | N/A | |||||||||
DILUTED NET EARNINGS PER COMMON SHARE | $ | 0.69 | $ | 0.18 | 283 | % | $ | 3.69 | $ | 2.44 | 51 | % | |||||||||
DIVIDENDS PER COMMON SHARE | $ | 0.669 | $ | 0.663 | 1 | % | $ | 2.658 | $ | 2.590 | 3 | % | |||||||||
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 2,811.0 | 2,878.5 | 2,844.4 | 2,883.6 | |||||||||||||||||
COMPARISONS AS A % OF NET SALES | Basis Pt Change | Basis Pt Change | |||||||||||||||||||
GROSS MARGIN | 47.9% | 46.6% | 130 | 49.6% | 47.6% | 200 | |||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE | 32.4% | 29.5% | 290 | 29.0% | 29.1% | (10) | |||||||||||||||
VENEZUELA DECONSOLIDATION CHARGE | —% | 12.3% | (1,230) | —% | 2.9% | (290) | |||||||||||||||
OPERATING MARGIN | 15.5% | 4.9% | 1,060 | 20.6% | 15.6% | 500 | |||||||||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 16.7% | 6.4% | 1,030 | 20.5% | 15.6% | 490 | |||||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 12.5% | 3.0% | 950 | 15.4% | 11.7% | 370 | |||||||||||||||
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE | 12.1% | 3.1% | 900 | 16.1% | 9.9% | 620 |
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Consolidated Earnings Information | ||||||
Three Months Ended June 30, 2016 | ||||||
Net Sales | % Change Versus Year Ago | Earnings/(Loss) from Continuing Operations Before Income Taxes | % Change Versus Year Ago | Net Earnings/(Loss) from Continuing Operations | % Change Versus Year Ago | |
Beauty | $2,754 | (5)% | $436 | (29)% | $308 | (32)% |
Grooming | 1,712 | 1% | 462 | 6% | 361 | 12% |
Health Care | 1,803 | 6% | 386 | 46% | 260 | 50% |
Fabric & Home Care | 5,104 | (4)% | 938 | (2)% | 606 | (2)% |
Baby, Feminine & Family Care | 4,631 | (4)% | 918 | (7)% | 587 | (11)% |
Corporate | 98 | (11)% | (454) | N/A | (114) | N/A |
Total Company | $16,102 | (3)% | $2,686 | 152% | $2,008 | 305% |
Three Months Ended June 30, 2016 | |||||||
(Percent Change vs. Year Ago)* | |||||||
Volume with Acquisitions & Divestitures | Volume Excluding Acquisitions & Divestitures | Foreign Exchange | Price | Mix | Other** | Net Sales Growth | |
Beauty | (3)% | 1% | (3)% | 1% | —% | —% | (5)% |
Grooming | 2% | 2% | (4)% | 4% | —% | (1)% | 1% |
Health Care | 5% | 5% | (2)% | 2% | 1% | —% | 6% |
Fabric & Home Care | —% | 2% | (2)% | (1)% | (1)% | —% | (4)% |
Baby, Feminine & Family Care | 1% | 2% | (3)% | (2)% | —% | —% | (4)% |
Total Company | —% | 2% | (3)% | —% | —% | —% | (3)% |
Twelve Months Ended June 30, 2016 | ||||||
Net Sales | % Change Versus Year Ago | Earnings/(Loss) from Continuing Operations Before Income Taxes | % Change Versus Year Ago | Net Earnings/(Loss) from Continuing Operations | % Change Versus Year Ago | |
Beauty | $11,477 | (9)% | $2,636 | (9)% | $1,975 | (9)% |
Grooming | 6,815 | (8)% | 2,009 | (15)% | 1,548 | (13)% |
Health Care | 7,350 | (5)% | 1,812 | 7% | 1,250 | 7% |
Fabric & Home Care | 20,730 | (7)% | 4,249 | 5% | 2,778 | 5% |
Baby, Feminine & Family Care | 18,505 | (9)% | 4,042 | (6)% | 2,650 | (10)% |
Corporate | 422 | (9)% | (1,379) | N/A | (174) | N/A |
Total Company | $65,299 | (8)% | $13,369 | 21% | $10,027 | 21% |
Twelve Months Ended June 30, 2016 | |||||||
(Percent Change vs. Year Ago)* | |||||||
Volume with Acquisitions & Divestitures | Volume Excluding Acquisitions & Divestitures | Foreign Exchange | Price | Mix | Other** | Net Sales Growth | |
Beauty | (5)% | (2)% | (6)% | 2% | —% | —% | (9)% |
Grooming | (2)% | (2)% | (9)% | 5% | (2)% | —% | (8)% |
Health Care | (2)% | (2)% | (6)% | 2% | 1% | —% | (5)% |
Fabric & Home Care | (1)% | 1% | (6)% | —% | —% | —% | (7)% |
Baby, Feminine & Family Care | (3)% | (2)% | (6)% | —% | —% | —% | (9)% |
Total Company | (3)% | (1)% | (6)% | 1% | —% | —% | (8)% |
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Consolidated Statements of Cash Flows | |||||||
Twelve Months Ended June 30 | |||||||
2016 | 2015 | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | $ | 6,836 | $ | 8,548 | |||
OPERATING ACTIVITIES | |||||||
NET EARNINGS | 10,604 | 7,144 | |||||
DEPRECIATION AND AMORTIZATION | 3,078 | 3,134 | |||||
SHARE-BASED COMPENSATION EXPENSE | 335 | 337 | |||||
DEFERRED INCOME TAXES | (815 | ) | (803 | ) | |||
VENEZUELA DECONSOLIDATION CHARGE | — | 2,028 | |||||
GAIN ON SALE OF BUSINESSES | (41 | ) | (766 | ) | |||
GOODWILL AND INTANGIBLE ASSET IMPAIRMENT CHARGES | 450 | 2,174 | |||||
CHANGES IN: | |||||||
ACCOUNTS RECEIVABLE | 35 | 349 | |||||
INVENTORIES | 116 | 313 | |||||
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES | 1,285 | 928 | |||||
OTHER OPERATING ASSETS & LIABILITIES | 204 | (976 | ) | ||||
OTHER | 184 | 746 | |||||
TOTAL OPERATING ACTIVITIES | 15,435 | 14,608 | |||||
INVESTING ACTIVITIES | |||||||
CAPITAL EXPENDITURES | (3,314 | ) | (3,736 | ) | |||
PROCEEDS FROM ASSET SALES | 432 | 4,498 | |||||
CASH RELATED TO DECONSOLIDATED VENEZUELA OPERATIONS | — | (908 | ) | ||||
ACQUISITIONS, NET OF CASH ACQUIRED | (186 | ) | (137 | ) | |||
PURCHASES OF SHORT-TERM INVESTMENTS | (2,815 | ) | (3,647 | ) | |||
PROCEEDS FROM SALES OF SHORT-TERM INVESTMENTS | 1,354 | 1,203 | |||||
CASH TRANSFERRED IN BATTERIES DIVESTITURE | (143 | ) | — | ||||
RESTRICTED CASH RELATED TO BEAUTY BRANDS DIVESTITURE | (996 | ) | — | ||||
CHANGE IN OTHER INVESTMENTS | 93 | (163 | ) | ||||
TOTAL INVESTING ACTIVITIES | (5,575 | ) | (2,890 | ) | |||
FINANCING ACTIVITIES | |||||||
DIVIDENDS TO SHAREHOLDERS | (7,436 | ) | (7,287 | ) | |||
CHANGE IN SHORT-TERM DEBT | (418 | ) | (2,580 | ) | |||
ADDITIONS TO LONG-TERM DEBT | 3,916 | 2,138 | |||||
REDUCTIONS OF LONG-TERM DEBT | (2,213 | ) | (3,512 | ) | |||
TREASURY STOCK PURCHASES | (4,004 | ) | (4,604 | ) | |||
TREASURY STOCK FROM CASH INFUSED IN THE BATTERIES DIVESTITURE | (1,730 | ) | — | ||||
IMPACT OF STOCK OPTIONS AND OTHER | 2,672 | 2,826 | |||||
TOTAL FINANCING ACTIVITIES | (9,213 | ) | (13,019 | ) | |||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (381 | ) | (411 | ) | |||
CHANGE IN CASH AND CASH EQUIVALENTS | 266 | (1,712 | ) | ||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 7,102 | $ | 6,836 |
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Condensed Consolidated Balance Sheets | |||||||
June 30, 2016 | June 30, 2015 | ||||||
CASH AND CASH EQUIVALENTS | $ | 7,102 | $ | 6,836 | |||
AVAILABLE-FOR-SALE INVESTMENTS SECURITIES | 6,246 | 4,767 | |||||
ACCOUNTS RECEIVABLE | 4,373 | 4,568 | |||||
INVENTORIES | 4,716 | 4,979 | |||||
DEFERRED INCOME TAXES | 1,507 | 1,356 | |||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 2,653 | 2,708 | |||||
CURRENT ASSETS HELD FOR SALE | 7,185 | 4,432 | |||||
TOTAL CURRENT ASSETS | 33,782 | 29,646 | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 19,385 | 19,655 | |||||
GOODWILL | 44,350 | 44,622 | |||||
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET | 24,527 | 25,010 | |||||
NONCURRENT ASSETS HELD FOR SALE | — | 5,204 | |||||
OTHER NONCURRENT ASSETS | 5,092 | 5,358 | |||||
TOTAL ASSETS | $ | 127,136 | $ | 129,495 | |||
ACCOUNTS PAYABLE | $ | 9,325 | $ | 8,138 | |||
ACCRUED AND OTHER LIABILITIES | 7,449 | 8,091 | |||||
CURRENT LIABILITIES HELD FOR SALE | 2,343 | 1,543 | |||||
DEBT DUE WITHIN ONE YEAR | 11,653 | 12,018 | |||||
TOTAL CURRENT LIABILITIES | 30,770 | 29,790 | |||||
LONG-TERM DEBT | 18,945 | 18,327 | |||||
DEFERRED INCOME TAXES | 9,113 | 9,179 | |||||
NONCURRENT LIABILITIES HELD FOR SALE | — | 717 | |||||
OTHER NONCURRENT LIABILITIES | 10,325 | 8,432 | |||||
TOTAL LIABILITIES | 69,153 | 66,445 | |||||
TOTAL SHAREHOLDERS' EQUITY | 57,983 | 63,050 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 127,136 | $ | 129,495 |
• | Incremental restructuring: While the Company has and continues to have an ongoing level of restructuring activities, 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. |
• | Venezuela deconsolidation charge: For accounting purposes, evolving conditions resulted in a lack of control over our Venezuelan subsidiaries. Therefore, in accordance with the applicable accounting standards for consolidation, effective June 30, 2015, we deconsolidated our Venezuelan subsidiaries and began accounting for our investment in those subsidiaries using the cost method of accounting. The charge was incurred to write off our net assets related to Venezuela. |
• | Charges for certain European legal matters: Several countries in Europe issued separate complaints alleging that the Company, along with several other companies, engaged in violations of competition laws in prior periods. The Company established legal reserves related to these charges. Management does not view these charges as indicative of underlying business results. |
• | Venezuela Balance Sheet Remeasurement & Devaluation Impacts: Venezuela is a highly inflationary economy under U.S. GAAP. Prior to deconsolidation, the government enacted episodic changes to currency exchange mechanisms and rates, which resulted in currency remeasurement charges for non-dollar denominated monetary assets and liabilities held by our Venezuelan subsidiaries. |
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Selected Financial Information & Non-GAAP Measures | |||||||||||||||||
Three Months Ended June 30, 2016 | |||||||||||||||||
AS REPORTED (GAAP) | DISCONTINUED OPERATIONS | INCREMENTAL RESTRUCTURING | CHARGES FOR EUROPEAN LEGAL MATTERS | ROUNDING | NON-GAAP (CORE) | ||||||||||||
NET SALES | 16,102 | — | — | — | — | 16,102 | |||||||||||
COST OF PRODUCTS SOLD | 8,382 | — | (235 | ) | — | — | 8,147 | ||||||||||
GROSS PROFIT | 7,720 | — | 235 | — | — | 7,955 | |||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE | 5,218 | — | 4 | — | — | 5,222 | |||||||||||
OPERATING INCOME | 2,502 | — | 231 | — | — | 2,733 | |||||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | 2,686 | — | 231 | — | — | 2,917 | |||||||||||
INCOME TAX ON CONTINUING OPERATIONS | 678 | — | 17 | — | 695 | ||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 2,008 | — | 215 | — | (1 | ) | 2,222 | ||||||||||
NET EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS | (50 | ) | 50 | — | — | — | |||||||||||
NET EARNINGS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 7 | 1 | — | — | (1 | ) | 7 | ||||||||||
NET EARNINGS ATTRIBUTABLE TO P&G | 1,951 | 49 | 215 | — | 2,215 | ||||||||||||
GROSS MARGIN | 47.9 | % | — | % | 1.5 | % | — | % | 49.4 | % | |||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE AS A % OF NET SALES | 32.4 | % | — | % | — | % | — | % | — | % | 32.4 | % | |||||
OPERATING PROFIT MARGIN | 15.5 | % | — | % | 1.4 | % | — | % | 0.1 | % | 17.0 | % | |||||
EFFECTIVE TAX RATE | 25.2 | % | — | % | (1.4 | )% | — | % | — | % | 23.8 | % | |||||
Core EPS: | |||||||||||||||||
DILUTED NET EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS* | 0.71 | — | 0.08 | — | — | 0.79 | |||||||||||
CURRENCY IMPACT TO CORE EARNINGS | (0.07 | ) | |||||||||||||||
CURRENCY-NEUTRAL CORE EPS | 0.86 |
CHANGE VERSUS YEAR AGO | |||
CORE GROSS MARGIN | 160 | BPS | |
CORE SELLING GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES | 310 | BPS | |
CORE OPERATING PROFIT MARGIN | (150 | ) | BPS |
CORE EFFECTIVE TAX RATE | 540 | BPS | |
CORE EPS | (15 | )% | |
CURRENCY-NEUTRAL CORE EPS | (8 | )% |
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Selected Financial Information & Non-GAAP Measures | ||||||||||||||||||||
Three Months Ended June 30, 2015 | ||||||||||||||||||||
AS REPORTED (GAAP) | DISCONTINUED OPERATIONS | INCREMENTAL RESTRUCTURING | VENEZUELA DECONSOLIDATION | CHARGES FOR EUROPEAN LEGAL MATTERS | ROUNDING | NON-GAAP (CORE) | ||||||||||||||
NET SALES | 16,553 | — | — | — | — | — | 16,553 | |||||||||||||
COST OF PRODUCTS SOLD | 8,837 | — | (199 | ) | — | — | — | 8,638 | ||||||||||||
GROSS PROFIT | 7,716 | — | 199 | — | — | — | 7,915 | |||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE | 4,876 | — | (37 | ) | — | 16 | — | 4,855 | ||||||||||||
VENEZUELA DECONSOLIDATION CHARGE | 2,028 | — | — | (2,028 | ) | — | — | — | ||||||||||||
OPERATING INCOME | 812 | — | 236 | 2,028 | (16 | ) | — | 3,060 | ||||||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | 1,065 | — | 236 | 2,028 | (16 | ) | 1 | 3,314 | ||||||||||||
INCOME TAX ON CONTINUING OPERATIONS | 569 | — | 63 | (24 | ) | — | 1 | 609 | ||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 496 | — | 173 | 2,052 | (16 | ) | — | 2,705 | ||||||||||||
NET EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS | 42 | (42 | ) | — | — | — | — | — | ||||||||||||
NET EARNINGS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 17 | (2 | ) | — | — | — | — | 15 | ||||||||||||
NET EARNINGS ATTRIBUTABLE TO P&G | 521 | (40 | ) | 173 | 2,052 | (16 | ) | — | 2,690 | |||||||||||
GROSS MARGIN | 46.6 | % | — | % | 1.2 | % | — | % | — | % | — | % | 47.8 | % | ||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE AS A % OF NET SALES | 29.5 | % | — | % | (0.2 | )% | — | % | 0.1 | % | (0.1 | )% | 29.3 | % | ||||||
OPERATING PROFIT MARGIN | 4.9 | % | — | % | 1.4 | % | 12.3 | % | (0.1 | )% | — | % | 18.5 | % | ||||||
EFFECTIVE TAX RATE | 53.4 | % | — | % | 0.6 | % | (35.8 | )% | 0.1 | % | 0.1 | % | 18.4 | % | ||||||
CORE EPS | ||||||||||||||||||||
DILUTED NET EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS* | 0.17 | 0.06 | 0.71 | (0.01 | ) | 0.93 |
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Selected Financial Information & Non-GAAP Measures | |||||||||||||||||
Fiscal Year Ended June 30, 2016 | |||||||||||||||||
AS REPORTED (GAAP) | DISCONTINUED OPERATIONS | INCREMENTAL RESTRUCTURING | CHARGES FOR EUROPEAN LEGAL MATTERS | ROUNDING | NON-GAAP (CORE) | ||||||||||||
NET SALES | 65,299 | — | — | — | — | 65,299 | |||||||||||
COST OF PRODUCTS SOLD | 32,909 | — | (624 | ) | — | — | 32,285 | ||||||||||
GROSS PROFIT | 32,390 | — | 624 | — | — | 33,014 | |||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE | 18,949 | — | 31 | (13 | ) | — | 18,967 | ||||||||||
OPERATING INCOME | 13,441 | — | 593 | 13 | — | 14,047 | |||||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | 13,369 | — | 593 | 13 | (1 | ) | 13,974 | ||||||||||
INCOME TAX ON CONTINUING OPERATIONS | 3,342 | — | 94 | 2 | (1 | ) | 3,437 | ||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 10,027 | — | 499 | 11 | 10,537 | ||||||||||||
NET EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS | 577 | (577 | ) | — | — | ||||||||||||
NET EARNINGS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 96 | — | — | 96 | |||||||||||||
NET EARNINGS ATTRIBUTABLE TO P&G | 10,508 | (577 | ) | 499 | 11 | 10,441 | |||||||||||
GROSS MARGIN | 49.6 | % | — | % | 1.0 | % | — | % | — | % | 50.6 | % | |||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE AS A % OF NET SALES | 29.0 | % | — | % | — | % | — | % | — | % | 29.0 | % | |||||
OPERATING PROFIT MARGIN | 20.6 | % | — | % | 0.9 | % | — | % | — | % | 21.5 | % | |||||
EFFECTIVE TAX RATE | 25.0 | % | — | % | (0.4 | )% | — | % | — | % | 24.6 | % | |||||
Core EPS: | |||||||||||||||||
DILUTED NET EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS* | 3.49 | — | 0.18 | — | — | 3.67 | |||||||||||
CURRENCY IMPACT TO CORE EARNINGS | (0.35 | ) | |||||||||||||||
CURRENCY-NEUTRAL CORE EPS | 4.02 |
CHANGE VERSUS YEAR AGO | |||
CORE GROSS MARGIN | 220 | BPS | |
CORE SELLING GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES | 20 | BPS | |
CORE OPERATING PROFIT MARGIN | 190 | BPS | |
CORE EFFECTIVE TAX RATE | 380 | BPS | |
CORE EPS | (2 | )% | |
CURRENCY-NEUTRAL CORE EPS | 7 | % |
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Selected Financial Information & Non-GAAP Measures | |||||||||||||||||||||||
Fiscal Year Ended June 30, 2015 | |||||||||||||||||||||||
AS REPORTED (GAAP) | DISCONTINUED OPERATIONS | INCREMENTAL RESTRUCTURING | VENEZUELA B/S REMEASUREMENT & DEVALUATION | VENEZUELA DECONSOLIDATION | CHARGES FOR EUROPEAN LEGAL MATTERS | ROUNDING | NON-GAAP (CORE) | ||||||||||||||||
NET SALES | 70,749 | — | — | — | — | — | — | 70,749 | |||||||||||||||
COST OF PRODUCTS SOLD | 37,056 | — | (518 | ) | — | — | — | (1 | ) | 36,537 | |||||||||||||
GROSS PROFIT | 33,693 | — | 518 | — | — | — | 1 | 34,212 | |||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE | 20,616 | — | (103 | ) | (138 | ) | — | (28 | ) | 1 | 20,348 | ||||||||||||
VENEZUELA DECONSOLIDATION CHARGE | 2,028 | — | (2,028 | ) | — | — | |||||||||||||||||
OPERATING INCOME | 11,049 | — | 621 | 138 | 2,028 | 28 | — | 13,864 | |||||||||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | 11,012 | — | 621 | 138 | 2,028 | 28 | — | 13,827 | |||||||||||||||
INCOME TAX ON CONTINUING OPERATIONS | 2,725 | — | 145 | 34 | (24 | ) | — | (1 | ) | 2,879 | |||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 8,287 | — | 476 | 104 | 2,052 | 28 | 1 | 10,948 | |||||||||||||||
NET EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS | (1,143 | ) | 1,143 | — | — | — | — | — | — | ||||||||||||||
NET EARNINGS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 108 | (10 | ) | — | — | — | — | 98 | |||||||||||||||
NET EARNINGS ATTRIBUTABLE TO P&G | 7,036 | 1,153 | 476 | 104 | 2,052 | 28 | 1 | 10,850 | |||||||||||||||
GROSS MARGIN | 47.6 | % | — | % | 0.7 | % | — | % | — | % | — | % | 0.1 | % | 48.4 | % | |||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE AS A % OF NET SALES | 29.1 | % | — | % | (0.1 | )% | (0.2 | )% | — | % | — | % | — | % | 28.8 | % | |||||||
OPERATING PROFIT MARGIN | 15.6 | % | — | % | 0.9 | % | 0.2 | % | 2.9 | % | — | % | — | % | 19.6 | % | |||||||
EFFECTIVE TAX RATE | 24.7 | % | — | % | 0.1 | % | — | % | (4.0 | )% | — | % | — | % | 20.8 | % | |||||||
CORE EPS | |||||||||||||||||||||||
DILUTED NET EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS* | 2.84 | — | 0.17 | 0.04 | 0.71 | 0.01 | (0.01 | ) | 3.76 |
April - June 2016 | Net Sales Growth | Foreign Exchange Impact | Acquisition/Divestiture Impact* | Organic Sales Growth | |||
Beauty | (5)% | 3% | 3% | 1% | |||
Grooming | 1% | 4% | 2% | 7% | |||
Health Care | 6% | 2% | —% | 8% | |||
Fabric & Home Care | (4)% | 2% | 3% | 1% | |||
Baby, Feminine & Family Care | (4)% | 3% | 2% | 1% | |||
Total P&G | (3)% | 3% | 2% | 2% |
Total P&G | Net Sales Growth | Combined Foreign Exchange & Acquisition/Divestiture Impact* | Organic Sales Growth | |||
FY 2017 (Estimate) | 1% | 1% | 2% |
Total P&G | Diluted EPS Growth | Impact of Incremental Non-Core Items* | Core EPS Growth | |||
FY 2017 (Estimate) | Up 45% to 55% | (41%) to (49%) | Up mid-single digits |
Three Months Ended June 30, 2016 | ||
Operating Cash Flow | Capital Spending | Free Cash Flow |
$4,139 | $(1,291) | $2,848 |
Twelve Months Ended June 30, 2016 | ||
Operating Cash Flow | Capital Spending | Free Cash Flow |
$15,435 | $(3,314) | $12,121 |
Three Months Ended June 30, 2016 | ||||
Net Earnings | Gain on Batteries Sale | Impairment Charges | Net Earnings Excluding Batteries Gain/Impairment Charges | Adjusted Free Cash Flow Productivity |
$1,958 | $— | $— | $1,958 | 145% |
Twelve Months Ended June 30, 2016 | ||||
Net Earnings | Gain on Batteries Sale | Impairment Charges | Net Earnings Excluding Batteries Gain/Impairment Charges | Adjusted Free Cash Flow Productivity |
$10,604 | $(422) | $350 | $10,532 | 115% |