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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Procter and Gamble Co | NYSE:PG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.90 | 0.55% | 164.74 | 164.71 | 162.16 | 163.52 | 5,581,695 | 01:00:00 |
FORM 10-Q
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Ohio
|
|
1-434
|
|
31-0411980
|
(State of Incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer Identification Number)
|
One Procter & Gamble Plaza, Cincinnati, Ohio
|
|
45202
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Item 1.
|
Financial Statements
|
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
Amounts in millions except per share amounts
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
NET SALES
|
$
|
16,856
|
|
|
$
|
16,915
|
|
|
$
|
33,374
|
|
|
$
|
33,442
|
|
Cost of products sold
|
8,298
|
|
|
8,460
|
|
|
16,400
|
|
|
16,612
|
|
||||
Selling, general and administrative expense
|
4,683
|
|
|
4,602
|
|
|
9,328
|
|
|
9,209
|
|
||||
OPERATING INCOME
|
3,875
|
|
|
3,853
|
|
|
7,646
|
|
|
7,621
|
|
||||
Interest expense
|
122
|
|
|
143
|
|
|
253
|
|
|
283
|
|
||||
Interest income
|
42
|
|
|
58
|
|
|
77
|
|
|
102
|
|
||||
Other non-operating income/(loss), net
|
(539
|
)
|
|
35
|
|
|
(476
|
)
|
|
17
|
|
||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
3,256
|
|
|
3,803
|
|
|
6,994
|
|
|
7,457
|
|
||||
Income taxes on continuing operations
|
695
|
|
|
898
|
|
|
1,558
|
|
|
1,775
|
|
||||
NET EARNINGS FROM CONTINUING OPERATIONS
|
2,561
|
|
|
2,905
|
|
|
5,436
|
|
|
5,682
|
|
||||
NET EARNINGS FROM DISCONTINUED OPERATIONS
|
5,335
|
|
|
323
|
|
|
5,217
|
|
|
181
|
|
||||
NET EARNINGS
|
7,896
|
|
|
3,228
|
|
|
10,653
|
|
|
5,863
|
|
||||
Less: Net earnings attributable to noncontrolling interests
|
21
|
|
|
22
|
|
|
64
|
|
|
56
|
|
||||
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE
|
$
|
7,875
|
|
|
$
|
3,206
|
|
|
$
|
10,589
|
|
|
$
|
5,807
|
|
|
|
|
|
|
|
|
|
||||||||
BASIC NET EARNINGS PER COMMON SHARE:
(1)
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
0.96
|
|
|
$
|
1.04
|
|
|
$
|
1.99
|
|
|
$
|
2.02
|
|
Earnings from discontinued operations
|
2.05
|
|
|
0.12
|
|
|
1.98
|
|
|
0.07
|
|
||||
BASIC NET EARNINGS PER COMMON SHARE
|
3.01
|
|
|
1.16
|
|
|
3.97
|
|
|
2.09
|
|
||||
DILUTED NET EARNINGS PER COMMON SHARE:
(1)
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
0.93
|
|
|
$
|
1.01
|
|
|
$
|
1.93
|
|
|
$
|
1.97
|
|
Earnings from discontinued operations
|
1.95
|
|
|
0.11
|
|
|
1.88
|
|
|
0.06
|
|
||||
DILUTED NET EARNINGS PER COMMON SHARE
|
2.88
|
|
|
1.12
|
|
|
3.81
|
|
|
2.03
|
|
||||
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
|
|
(1)
|
Basic net earnings per share and Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.
|
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
Amounts in millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
NET EARNINGS
|
$
|
7,896
|
|
|
$
|
3,228
|
|
|
$
|
10,653
|
|
|
$
|
5,863
|
|
OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX
|
|
|
|
|
|
|
|
||||||||
Financial statement translation
|
(1,988
|
)
|
|
(955
|
)
|
|
(1,989
|
)
|
|
(1,978
|
)
|
||||
Unrealized gains/(losses) on hedges
|
864
|
|
|
252
|
|
|
749
|
|
|
210
|
|
||||
Unrealized gains/(losses) on investment securities
|
(55
|
)
|
|
(28
|
)
|
|
(68
|
)
|
|
(20
|
)
|
||||
Unrealized gains/(losses) on defined benefit retirement plans
|
600
|
|
|
143
|
|
|
693
|
|
|
234
|
|
||||
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX
|
(579
|
)
|
|
(588
|
)
|
|
(615
|
)
|
|
(1,554
|
)
|
||||
TOTAL COMPREHENSIVE INCOME/(LOSS)
|
7,317
|
|
|
2,640
|
|
|
10,038
|
|
|
4,309
|
|
||||
Less: Total comprehensive income attributable to noncontrolling interests
|
21
|
|
|
22
|
|
|
64
|
|
|
56
|
|
||||
TOTAL COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO PROCTER & GAMBLE
|
$
|
7,296
|
|
|
$
|
2,618
|
|
|
$
|
9,974
|
|
|
$
|
4,253
|
|
Amounts in millions
|
|
|
|
|
December 31, 2016
|
|
June 30, 2016
|
|||||
Assets
|
|
|
|
|
|
|
|
|||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
|
|
|
$
|
6,051
|
|
|
$
|
7,102
|
|
|
Available-for-sale investment securities
|
|
|
|
|
7,403
|
|
|
6,246
|
|
|||
Accounts receivable
|
|
|
|
|
4,729
|
|
|
4,373
|
|
|||
INVENTORIES
|
|
|
|
|
|
|
|
|||||
Materials and supplies
|
|
|
|
|
1,398
|
|
|
1,188
|
|
|||
Work in process
|
|
|
|
|
522
|
|
|
563
|
|
|||
Finished goods
|
|
|
|
|
2,867
|
|
|
2,965
|
|
|||
Total 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
|
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|||||
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
|
|
|||
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|||||
Preferred stock
|
|
|
|
|
1,024
|
|
|
1,038
|
|
|||
Common stock – shares issued –
|
December 2016
|
|
4,009.2
|
|
|
|
|
|
||||
|
June 2016
|
|
4,009.2
|
|
|
4,009
|
|
|
4,009
|
|
||
Additional paid-in capital
|
|
|
|
|
63,596
|
|
|
63,714
|
|
|||
Reserve for ESOP debt retirement
|
|
|
|
|
(1,272
|
)
|
|
(1,290
|
)
|
|||
Accumulated other comprehensive income/(loss)
|
|
|
|
|
(16,522
|
)
|
|
(15,907
|
)
|
|||
Treasury stock
|
|
|
|
|
(92,720
|
)
|
|
(82,176
|
)
|
|||
Retained earnings
|
|
|
|
|
94,945
|
|
|
87,953
|
|
|||
Noncontrolling interest
|
|
|
|
|
684
|
|
|
642
|
|
|||
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
|
|
53,744
|
|
|
57,983
|
|
|||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
$
|
117,033
|
|
|
$
|
127,136
|
|
|
Six Months Ended December 31
|
||||||
Amounts in millions
|
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 and 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 Brands divestiture
|
(874
|
)
|
|
—
|
|
||
Cash transferred at closing related to the Beauty Brands divestiture
|
(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.
|
|
|
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||||||||||
|
|
|
Net Sales
|
|
Earnings/(Loss) from Continuing Operations Before Income Taxes
|
|
Net Earnings/(Loss) from Continuing Operations
|
|
Net Sales
|
|
Earnings/(Loss) from Continuing Operations Before Income Taxes
|
|
Net Earnings/(Loss) from Continuing Operations
|
||||||||||||
Beauty
|
2016
|
|
$
|
2,942
|
|
|
$
|
714
|
|
|
$
|
540
|
|
|
$
|
5,938
|
|
|
$
|
1,497
|
|
|
$
|
1,132
|
|
|
2015
|
|
2,963
|
|
|
774
|
|
|
585
|
|
|
6,004
|
|
|
1,596
|
|
|
1,209
|
|
||||||
Grooming
|
2016
|
|
1,789
|
|
|
614
|
|
|
469
|
|
|
3,447
|
|
|
1,143
|
|
|
884
|
|
||||||
|
2015
|
|
1,806
|
|
|
579
|
|
|
441
|
|
|
3,480
|
|
|
1,078
|
|
|
831
|
|
||||||
Health Care
|
2016
|
|
2,072
|
|
|
608
|
|
|
422
|
|
|
3,933
|
|
|
1,104
|
|
|
742
|
|
||||||
|
2015
|
|
1,978
|
|
|
564
|
|
|
394
|
|
|
3,774
|
|
|
1,012
|
|
|
712
|
|
||||||
Fabric & Home Care
|
2016
|
|
5,270
|
|
|
1,125
|
|
|
725
|
|
|
10,572
|
|
|
2,254
|
|
|
1,453
|
|
||||||
|
2015
|
|
5,347
|
|
|
1,177
|
|
|
773
|
|
|
10,598
|
|
|
2,297
|
|
|
1,520
|
|
||||||
Baby, Feminine & Family Care
|
2016
|
|
4,645
|
|
|
1,038
|
|
|
680
|
|
|
9,240
|
|
|
2,083
|
|
|
1,377
|
|
||||||
|
2015
|
|
4,710
|
|
|
1,037
|
|
|
683
|
|
|
9,368
|
|
|
2,148
|
|
|
1,432
|
|
||||||
Corporate
|
2016
|
|
138
|
|
|
(843
|
)
|
|
(275
|
)
|
|
244
|
|
|
(1,087
|
)
|
|
(152
|
)
|
||||||
|
2015
|
|
111
|
|
|
(328
|
)
|
|
29
|
|
|
218
|
|
|
(674
|
)
|
|
(22
|
)
|
||||||
Total Company
|
2016
|
|
$
|
16,856
|
|
|
$
|
3,256
|
|
|
$
|
2,561
|
|
|
$
|
33,374
|
|
|
$
|
6,994
|
|
|
$
|
5,436
|
|
|
2015
|
|
16,915
|
|
|
3,803
|
|
|
2,905
|
|
|
33,442
|
|
|
7,457
|
|
|
5,682
|
|
|
Beauty
|
|
Grooming
|
|
Health Care
|
|
Fabric & Home Care
|
|
Baby, Feminine & Family Care
|
|
Total Company
|
||||||||||||
Goodwill at June 30, 2016
|
$
|
12,645
|
|
|
$
|
19,477
|
|
|
$
|
5,840
|
|
|
$
|
1,856
|
|
|
$
|
4,532
|
|
|
$
|
44,350
|
|
Acquisitions and divestitures
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(3
|
)
|
|
—
|
|
|
(13
|
)
|
||||||
Translation and other
|
(308
|
)
|
|
(350
|
)
|
|
(100
|
)
|
|
(30
|
)
|
|
(91
|
)
|
|
(879
|
)
|
||||||
Goodwill at December 31, 2016
|
$
|
12,337
|
|
|
$
|
19,127
|
|
|
$
|
5,730
|
|
|
$
|
1,823
|
|
|
$
|
4,441
|
|
|
$
|
43,458
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||
Intangible assets with determinable lives
|
$
|
7,322
|
|
|
$
|
(4,703
|
)
|
Intangible assets with indefinite lives
|
21,566
|
|
|
—
|
|
||
Total identifiable intangible assets
|
$
|
28,888
|
|
|
$
|
(4,703
|
)
|
|
Three Months Ended December 31, 2016
|
|
Three Months Ended December 31, 2015
|
||||||||||||||||
CONSOLIDATED AMOUNTS
|
Continuing Operations
|
Discontinued Operations
|
Total
|
|
Continuing Operations
|
Discontinued Operations
|
Total
|
||||||||||||
Net earnings
|
$
|
2,561
|
|
$
|
5,335
|
|
$
|
7,896
|
|
|
$
|
2,905
|
|
$
|
323
|
|
$
|
3,228
|
|
Net earnings attributable to noncontrolling interests
|
(21
|
)
|
—
|
|
(21
|
)
|
|
(22
|
)
|
—
|
|
(22
|
)
|
||||||
Net earnings attributable to P&G (Diluted)
|
2,540
|
|
5,335
|
|
7,875
|
|
|
2,883
|
|
323
|
|
3,206
|
|
||||||
Preferred dividends, net of tax benefit
|
(61
|
)
|
—
|
|
(61
|
)
|
|
(64
|
)
|
—
|
|
(64
|
)
|
||||||
Net earnings attributable to P&G available to common shareholders (Basic)
|
$
|
2,479
|
|
$
|
5,335
|
|
$
|
7,814
|
|
|
$
|
2,819
|
|
$
|
323
|
|
$
|
3,142
|
|
|
|
|
|
|
|
|
|
||||||||||||
SHARES IN MILLIONS
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average common shares outstanding
|
2,596.6
|
|
2,596.6
|
|
2,596.6
|
|
|
2,718.9
|
|
2,718.9
|
|
2,718.9
|
|
||||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||||||||
Conversion of preferred shares
(1)
|
100.1
|
|
100.1
|
|
100.1
|
|
|
104.7
|
|
104.7
|
|
104.7
|
|
||||||
Exercise of stock options and other unvested equity awards
(2)
|
40.9
|
|
40.9
|
|
40.9
|
|
|
41.0
|
|
41.0
|
|
41.0
|
|
||||||
Diluted weighted average common shares outstanding
|
2,737.6
|
|
2,737.6
|
|
2,737.6
|
|
|
2,864.6
|
|
2,864.6
|
|
2,864.6
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
PER SHARE AMOUNTS
(3)
|
|
|
|
|
|
|
|
||||||||||||
Basic net earnings per common share
|
$
|
0.96
|
|
$
|
2.05
|
|
$
|
3.01
|
|
|
$
|
1.04
|
|
$
|
0.12
|
|
$
|
1.16
|
|
Diluted net earnings per common share
|
$
|
0.93
|
|
$
|
1.95
|
|
$
|
2.88
|
|
|
$
|
1.01
|
|
$
|
0.11
|
|
$
|
1.12
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended December 31, 2016
|
|
Six Months Ended December 31, 2015
|
||||||||||||||||
CONSOLIDATED AMOUNTS
|
Continuing Operations
|
Discontinued Operations
|
Total
|
|
Continuing Operations
|
Discontinued Operations
|
Total
|
||||||||||||
Net earnings
|
$
|
5,436
|
|
$
|
5,217
|
|
$
|
10,653
|
|
|
$
|
5,682
|
|
$
|
181
|
|
$
|
5,863
|
|
Net earnings attributable to noncontrolling interests
|
(64
|
)
|
—
|
|
(64
|
)
|
|
(56
|
)
|
—
|
|
(56
|
)
|
||||||
Net earnings attributable to P&G (Diluted)
|
5,372
|
|
5,217
|
|
10,589
|
|
|
5,626
|
|
181
|
|
5,807
|
|
||||||
Preferred dividends, net of tax benefit
|
(124
|
)
|
—
|
|
(124
|
)
|
|
(129
|
)
|
—
|
|
(129
|
)
|
||||||
Net earnings attributable to P&G available to common shareholders (Basic)
|
$
|
5,248
|
|
$
|
5,217
|
|
$
|
10,465
|
|
|
$
|
5,497
|
|
$
|
181
|
|
$
|
5,678
|
|
|
|
|
|
|
|
|
|
||||||||||||
SHARES IN MILLIONS
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average common shares outstanding
|
2,635.6
|
|
2,635.6
|
|
2,635.6
|
|
|
2,719.5
|
|
2,719.5
|
|
2,719.5
|
|
||||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||||||||
Conversion of preferred shares
(1)
|
100.5
|
|
100.5
|
|
100.5
|
|
|
105.2
|
|
105.2
|
|
105.2
|
|
||||||
Exercise of stock options and other unvested equity awards
(2)
|
44.1
|
|
44.1
|
|
44.1
|
|
|
41.1
|
|
41.1
|
|
41.1
|
|
||||||
Diluted weighted average common shares outstanding
|
2,780.2
|
|
2,780.2
|
|
2,780.2
|
|
|
2,865.8
|
|
2,865.8
|
|
2,865.8
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
PER SHARE AMOUNTS
(3)
|
|
|
|
|
|
|
|
||||||||||||
Basic net earnings per common share
|
$
|
1.99
|
|
$
|
1.98
|
|
$
|
3.97
|
|
|
$
|
2.02
|
|
$
|
0.07
|
|
$
|
2.09
|
|
Diluted net earnings per common share
|
$
|
1.93
|
|
$
|
1.88
|
|
$
|
3.81
|
|
|
$
|
1.97
|
|
$
|
0.06
|
|
$
|
2.03
|
|
(1)
|
Despite being included currently in Diluted net earnings per common share, the actual conversion to common stock occurs when the preferred shares are sold. Shares may only be sold after being allocated to the ESOP participants pursuant to the repayment of the ESOP's obligations through 2035.
|
(2)
|
Outstanding stock options of approximately
27 million
and
48 million
for the three months ended
December 31, 2016
and
2015
, respectively, and approximately
27 million
and
69 million
for the
six
months ended
December 31, 2016
and
2015
, respectively, were not included in the Diluted net earnings per share calculation because the options were out of the money or to do so would have been antidilutive (i.e., the total proceeds upon exercise would have exceeded the market value of the underlying common shares).
|
(3)
|
Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.
|
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Share-based compensation expense
|
$
|
74
|
|
|
$
|
74
|
|
|
$
|
118
|
|
|
$
|
140
|
|
Net periodic benefit cost for pension benefits
(1)
|
257
|
|
|
85
|
|
|
353
|
|
|
171
|
|
||||
Net periodic benefit cost/(credit) for other retiree benefits
(1)
|
58
|
|
|
(25
|
)
|
|
39
|
|
|
(49
|
)
|
(1)
|
The components of the total net periodic benefit cost for both pension benefits and other retiree benefits for those interim periods, on an annualized basis, do not differ materially from the amounts disclosed in the Annual Report on Form 10-K for the fiscal year ended
June 30, 2016
.
|
|
Fair Value Asset
|
||||||
|
December 31, 2016
|
|
June 30, 2016
|
||||
Investments
|
|
|
|
||||
U.S. government securities
|
$
|
5,599
|
|
|
$
|
4,839
|
|
Corporate bond securities
|
1,804
|
|
|
1,407
|
|
||
Other investments
|
30
|
|
|
28
|
|
||
Total
|
$
|
7,433
|
|
|
$
|
6,274
|
|
|
Notional Amount
|
|
Fair Value Asset/(Liability)
|
||||||||||||
|
December 31, 2016
|
|
June 30, 2016
|
|
December 31, 2016
|
|
June 30, 2016
|
||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
798
|
|
|
$
|
798
|
|
|
$
|
116
|
|
|
$
|
31
|
|
Derivatives in Fair Value Hedging Relationships
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
4,393
|
|
|
$
|
4,993
|
|
|
$
|
191
|
|
|
$
|
371
|
|
Derivatives in Net Investment Hedging Relationships
|
|
|
|
|
|
|
|
||||||||
Net investment hedges
|
$
|
3,044
|
|
|
$
|
3,013
|
|
|
$
|
147
|
|
|
$
|
(87
|
)
|
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
3,745
|
|
|
$
|
6,482
|
|
|
$
|
(20
|
)
|
|
$
|
(10
|
)
|
|
Amount of Gain/(Loss) Recognized in AOCI on Derivatives (Effective Portion)
|
||||||
|
December 31, 2016
|
|
June 30, 2016
|
||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
||||
Interest rate contracts
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Foreign currency contracts
|
(7
|
)
|
|
—
|
|
||
Total
|
$
|
(9
|
)
|
|
$
|
(2
|
)
|
Derivatives in Net Investment Hedging Relationships
|
|
|
|
||||
Net investment hedges
|
$
|
94
|
|
|
$
|
(53
|
)
|
|
Amount of Gain/(Loss) Reclassified from AOCI into Earnings
|
||||||||||||||
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Derivatives in Cash Flow Hedging Relationships
(1)
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Foreign currency contracts
|
107
|
|
|
8
|
|
|
99
|
|
|
(1
|
)
|
||||
Total
|
$
|
107
|
|
|
$
|
9
|
|
|
$
|
99
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
||||||||
|
Amount of Gain/(Loss) Recognized in Earnings
|
||||||||||||||
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Derivatives in Fair Value Hedging Relationships
(2)
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
(152
|
)
|
|
$
|
(50
|
)
|
|
$
|
(180
|
)
|
|
$
|
39
|
|
Debt
|
152
|
|
|
50
|
|
|
180
|
|
|
(39
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives in Net Investment Hedging Relationships
(2)
|
|
|
|
|
|
|
|
||||||||
Net investment hedges
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives Not Designated as Hedging Instruments
(3)
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
(176
|
)
|
|
$
|
(158
|
)
|
|
$
|
(184
|
)
|
|
$
|
(220
|
)
|
(1)
|
The gain or loss on the effective portion of cash flow hedging relationships is reclassified from AOCI into net income in the same period during which the related item affects earnings. Such amounts are included in the Consolidated Statements of Earnings as follows: interest rate contracts in Interest expense and foreign currency contracts in Selling, general and administrative expense (SG&A) and Interest expense.
|
(2)
|
The gain or loss on the ineffective portion of interest rate contracts and net investment hedges, if any, is included in the Consolidated Statements of Earnings in Interest expense.
|
(3)
|
The gain or loss on foreign currency contracts not designated as hedging instruments is included in the Consolidated Statements of Earnings in SG&A. This gain or loss substantially offsets the foreign currency mark-to-market impact of the related exposure.
|
|
Changes in Accumulated Other Comprehensive Income/(Loss) by Component
|
||||||||||||||||||
|
Hedges
|
|
Investment Securities
|
|
Pension and Other Retiree Benefits
|
|
Financial Statement Translation
|
|
Total
|
||||||||||
Balance at June 30, 2016
|
$
|
(2,641
|
)
|
|
$
|
34
|
|
|
$
|
(5,798
|
)
|
|
$
|
(7,502
|
)
|
|
$
|
(15,907
|
)
|
OCI before reclassifications
(1)
|
848
|
|
|
(63
|
)
|
|
385
|
|
|
(1,989
|
)
|
|
(819
|
)
|
|||||
Amounts reclassified from AOCI
(2) (3)
|
(99
|
)
|
|
(5
|
)
|
|
308
|
|
|
—
|
|
|
204
|
|
|||||
Net current period OCI
|
749
|
|
|
(68
|
)
|
|
693
|
|
|
(1,989
|
)
|
|
(615
|
)
|
|||||
Balance at December 31, 2016
|
$
|
(1,892
|
)
|
|
$
|
(34
|
)
|
|
$
|
(5,105
|
)
|
|
$
|
(9,491
|
)
|
|
$
|
(16,522
|
)
|
(1)
|
Net of tax expense/(benefit) of
$453
,
$(6)
and
$113
for gains/losses on hedges, investment securities and pension and other retiree benefit items, respectively.
|
(2)
|
Net of tax expense/(benefit) of
$0
,
$0
and
$114
for gains/losses on hedges, investment securities and pension and other retiree benefit items, respectively.
|
(3)
|
See Note 7 for classification of gains and losses from hedges in the Consolidated Statements of Earnings. Gains and losses on investment securities are reclassified from AOCI into Other non-operating income/(loss), net. Gains and losses on pension and other retiree benefits are reclassified from AOCI into Cost of products sold and SG&A and are included in the computation of net periodic pension costs.
|
|
|
|
|
|
|
|
Six Months Ended December 31, 2016
|
|
|
||||||||||||||
|
Accrual Balance June 30, 2016
|
|
Charges Previously Reported (Three Months Ended September 30, 2016)
|
|
Charges for the Three Months Ended December 31, 2016
|
|
Cash Spent
(1)
|
|
Charges Against Assets
|
|
Accrual Balance December 31, 2016
|
||||||||||||
Separations
|
$
|
243
|
|
|
$
|
47
|
|
|
$
|
49
|
|
|
$
|
(107
|
)
|
|
$
|
—
|
|
|
$
|
232
|
|
Asset-related costs
|
—
|
|
|
105
|
|
|
101
|
|
|
—
|
|
|
(206
|
)
|
|
—
|
|
||||||
Other costs
|
72
|
|
|
16
|
|
|
30
|
|
|
(62
|
)
|
|
—
|
|
|
56
|
|
||||||
Total
|
$
|
315
|
|
|
$
|
168
|
|
|
$
|
180
|
|
|
$
|
(169
|
)
|
|
$
|
(206
|
)
|
|
$
|
288
|
|
(1)
|
Includes liabilities transferred to Coty related to our Beauty Brands divestiture.
|
|
Three Months Ended December 31, 2016
|
|
Six Months Ended December 31, 2016
|
||||
Beauty
|
$
|
21
|
|
|
$
|
40
|
|
Grooming
|
12
|
|
|
17
|
|
||
Health Care
|
4
|
|
|
8
|
|
||
Fabric & Home Care
|
50
|
|
|
77
|
|
||
Baby, Feminine & Family Care
|
46
|
|
|
100
|
|
||
Corporate
(1)
|
47
|
|
|
106
|
|
||
Total Company
|
$
|
180
|
|
|
$
|
348
|
|
(1)
|
Corporate includes costs related to allocated overheads, including charges related to our Sales and Market Operations, Global Business Services and Corporate Functions activities and costs related to discontinued operations from our Beauty Brands businesses.
|
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Beauty Brands
|
$
|
5,335
|
|
|
$
|
238
|
|
|
$
|
5,217
|
|
|
$
|
388
|
|
Batteries
|
—
|
|
|
85
|
|
|
—
|
|
|
(207
|
)
|
||||
Net earnings/(loss) from discontinued operations
|
$
|
5,335
|
|
|
$
|
323
|
|
|
$
|
5,217
|
|
|
$
|
181
|
|
|
Beauty Brands
|
||||||||||||||
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,404
|
|
|
$
|
1,159
|
|
|
$
|
2,623
|
|
Cost of products sold
|
—
|
|
|
443
|
|
|
450
|
|
|
828
|
|
||||
Selling, general and administrative expense
|
—
|
|
|
664
|
|
|
783
|
|
|
1,311
|
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||
Other non-operating income/(loss), net
|
—
|
|
|
(3
|
)
|
|
16
|
|
|
(2
|
)
|
||||
Earnings/(loss) from discontinued operations before income taxes
|
$
|
—
|
|
|
$
|
294
|
|
|
$
|
(72
|
)
|
|
$
|
482
|
|
Income taxes on discontinued operations
|
—
|
|
|
56
|
|
|
46
|
|
|
94
|
|
||||
Gain on sale of business before income taxes
|
$
|
5,197
|
|
|
$
|
—
|
|
|
$
|
5,197
|
|
|
$
|
—
|
|
Income tax expense/(benefit) on sale of business
|
(138
|
)
|
(1)
|
—
|
|
|
(138
|
)
|
(1)
|
—
|
|
||||
Net earnings/(loss) from discontinued operations
|
$
|
5,335
|
|
|
$
|
238
|
|
|
$
|
5,217
|
|
|
$
|
388
|
|
(1)
|
The income tax benefit of the Beauty Brands divestiture represents the reversal of underlying deferred tax balances offset by current tax expense related to the transaction.
|
|
Beauty Brands
|
||||||
|
Six Months Ended December 31
|
||||||
|
2016
|
|
2015
|
||||
NON-CASH OPERATING ITEMS
|
|
|
|
||||
Depreciation and amortization
|
$
|
24
|
|
|
$
|
52
|
|
Deferred income tax benefit
|
(649
|
)
|
|
—
|
|
||
Before tax gain on sale of business
|
5,210
|
|
|
—
|
|
||
Net increase in accrued taxes
|
382
|
|
|
—
|
|
||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Cash taxes paid
|
$
|
129
|
|
|
$
|
—
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
$
|
38
|
|
|
$
|
35
|
|
|
Beauty Brands
|
||
|
June 30, 2016
|
||
Cash
|
$
|
40
|
|
Restricted cash
|
996
|
|
|
Accounts receivable
|
384
|
|
|
Inventories
|
494
|
|
|
Prepaid expenses and other current assets
|
126
|
|
|
Property, plant and equipment, net
|
629
|
|
|
Goodwill and intangible assets, net
|
4,411
|
|
|
Other noncurrent assets
|
105
|
|
|
Current assets held for sale
|
$
|
7,185
|
|
|
|
||
Accounts payable
|
$
|
148
|
|
Accrued and other liabilities
|
384
|
|
|
Noncurrent deferred tax liabilities
|
370
|
|
|
Long-term debt
|
996
|
|
|
Other noncurrent liabilities
|
445
|
|
|
Current liabilities held for sale
|
$
|
2,343
|
|
|
Batteries
|
||||||
|
Three Months Ended December 31, 2015
|
|
Six Months Ended December 31, 2015
|
||||
Net sales
|
$
|
691
|
|
|
$
|
1,197
|
|
Earnings before impairment charges and income taxes
|
138
|
|
|
231
|
|
||
Impairment charges
|
—
|
|
|
(402
|
)
|
||
Income tax (expense)/benefit
|
(53
|
)
|
|
(36
|
)
|
||
Net earnings/(loss) from discontinued operations
|
$
|
85
|
|
|
$
|
(207
|
)
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Overview
|
•
|
Summary of Results –
Six
Months Ended
December 31, 2016
|
•
|
Economic Conditions and Uncertainties
|
•
|
Results of Operations – Three and
Six
Months Ended
December 31, 2016
|
•
|
Business Segment Discussion – Three and
Six
Months Ended
December 31, 2016
|
•
|
Liquidity and Capital Resources
|
•
|
Reconciliation of Measures Not Defined by U.S. GAAP
|
Reportable Segments
|
Product Categories (Sub-Categories)
|
Major Brands
|
Beauty
|
Hair Care (
Conditioner, Shampoo, Styling Aids, Treatments
)
|
Head & Shoulders, Pantene, Rejoice
|
Skin and Personal Care (
Antiperspirant and Deodorant, Personal Cleansing, Skin Care
)
|
Olay, Old Spice, Safeguard, SK-II
|
|
Grooming
|
Grooming
(1)
(Shave Care -
Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other Shave Care;
Appliances)
|
Braun, Fusion, Gillette, Mach3, Prestobarba, Venus
|
Health Care
|
Oral Care (
Toothbrushes, Toothpaste, Other Oral Care
)
|
Crest, Oral-B
|
Personal Health Care (
Gastrointestinal, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Other Personal Health Care
)
|
Prilosec, Vicks
|
|
Fabric & Home Care
|
Fabric Care (
Fabric Enhancers, Laundry Additives, Laundry Detergents
)
|
Ariel, Downy, Gain, Tide
|
Home Care (
Air Care, Dish Care, P&G Professional, Surface Care
)
|
Cascade, Dawn, Febreze, Mr. Clean, Swiffer
|
|
Baby, Feminine & Family Care
|
Baby Care (
Baby Wipes, Diapers and Pants
)
|
Luvs, Pampers
|
Feminine Care (
Adult Incontinence, Feminine Care
)
|
Always, Tampax
|
|
Family Care (
Paper Towels, Tissues, Toilet Paper
)
|
Bounty, Charmin
|
(1)
|
The Grooming product category is comprised of the Shave Care and Appliances Global Business Units.
|
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||
|
Net Sales
|
|
Net Earnings
|
|
Net Sales
|
|
Net Earnings
|
Beauty
|
18%
|
|
19%
|
|
18%
|
|
20%
|
Grooming
|
11%
|
|
16%
|
|
10%
|
|
16%
|
Health Care
|
12%
|
|
15%
|
|
12%
|
|
13%
|
Fabric & Home Care
|
31%
|
|
26%
|
|
32%
|
|
26%
|
Baby, Feminine & Family Care
|
28%
|
|
24%
|
|
28%
|
|
25%
|
Total Company
|
100%
|
|
100%
|
|
100%
|
|
100%
|
•
|
Net sales
were unchanged versus the previous period at
$33.4 billion
. Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange,
increased 2%
. Organic sales increased
3%
in Beauty,
2%
in Grooming,
7%
in Health Care,
3%
in Fabric & Home Care and
2%
in Baby, Feminine & Family Care.
|
•
|
Unit volume
increased 1%
with organic volume
up 2%
. Volume increased mid-single digits in Health Care and low single digits in Fabric & Home Care, Baby, Feminine & Family Care and Grooming. Volume decreased low single digits in Beauty. Excluding the impacts of minor brand divestitures, organic volume increased low single digits in Beauty.
|
•
|
Net earnings from continuing operations were
$5.4 billion
,
a decrease of $246 million, or 4%
versus the prior year period. This decrease was driven by an increase in other non-operating expense due to a charge related to early extinguishment of certain long-term debt, partially offset by a lower effective tax rate.
|
•
|
Diluted net earnings per share from continuing operations
decreased 2% to
$1.93
.
|
•
|
Net earnings attributable to Procter & Gamble were
$10.6 billion
,
an increase of $4.8 billion or 82%
versus the prior year period, driven by the
$5.3 billion
after-tax gain on the sale of the Beauty Brands in the current period.
|
•
|
Core net earnings, which excludes discontinued operations, the charge related to early extinguishment of certain long-term debt and incremental restructuring charges, increased 1% to $5.9 billion. Core net earnings per share
increased 4% to
$2.11
due to the increase in core net earnings and the reduction in shares outstanding from shares tendered in the divestiture of the Beauty Brands to Coty.
|
•
|
Operating cash flow was
$6.0 billion
. Adjusted free cash flow, which is operating cash flow less capital expenditures and excluding tax payments related to the sale of the Beauty Brands, was
$4.7 billion
. Adjusted free cash flow productivity, which is the ratio of free cash flow to net earnings excluding a loss on early debt extinguishment and the gain on sale of the Beauty business, was
83%
.
|
|
Three Months Ended December 31
|
|||||||||
Amounts in millions, except per share amounts
|
2016
|
|
2015
|
|
% Chg
|
|||||
Net sales
|
$
|
16,856
|
|
|
$
|
16,915
|
|
|
—
|
%
|
Operating income
|
3,875
|
|
|
3,853
|
|
|
1
|
%
|
||
Net earnings from continuing operations
|
2,561
|
|
|
2,905
|
|
|
(12
|
)%
|
||
Net earnings from discontinued operations
|
5,335
|
|
|
323
|
|
|
1,552
|
%
|
||
Net earnings attributable to Procter & Gamble
|
7,875
|
|
|
3,206
|
|
|
146
|
%
|
||
Diluted net earnings per common share
|
2.88
|
|
|
1.12
|
|
|
157
|
%
|
||
Diluted net earnings per share from continuing operations
|
0.93
|
|
|
1.01
|
|
|
(8
|
)%
|
||
Core net earnings per common share
|
1.08
|
|
|
1.04
|
|
|
4
|
%
|
||
|
||||||||||
|
Three Months Ended December 31
|
|||||||||
COMPARISONS AS A % OF NET SALES
|
2016
|
|
2015
|
|
Basis Pt Chg
|
|||||
Gross profit
|
50.8%
|
|
50.0%
|
|
80
|
|||||
Selling, general & administrative expense
|
27.8%
|
|
27.2%
|
|
60
|
|||||
Operating income
|
23.0%
|
|
22.8%
|
|
20
|
|||||
Earnings from continuing operations before income taxes
|
19.3%
|
|
22.5%
|
|
(320)
|
|||||
Net earnings from continuing operations
|
15.2%
|
|
17.2%
|
|
(200)
|
|||||
Net earnings attributable to Procter & Gamble
|
46.7%
|
|
19.0%
|
|
2,770
|
|
Net Sales Change Drivers 2016 vs. 2015 (Three Months Ended December 31)*
|
||||||||||||
|
Volume with Acquisitions & Divestitures
|
|
Volume Excluding Acquisitions & Divestitures
|
|
Foreign Exchange
|
|
Price
|
|
Mix
|
|
Other**
|
|
Net Sales 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
|
|||||||||
Amounts in millions, except per share amounts
|
2016
|
|
2015
|
|
% Chg
|
|||||
Net sales
|
$
|
33,374
|
|
|
$
|
33,442
|
|
|
—
|
%
|
Operating income
|
7,646
|
|
|
7,621
|
|
|
—
|
%
|
||
Net earnings from continuing operations
|
5,436
|
|
|
5,682
|
|
|
(4
|
)%
|
||
Net earnings from discontinued operations
|
5,217
|
|
|
181
|
|
|
2,782
|
%
|
||
Net earnings attributable to Procter & Gamble
|
10,589
|
|
|
5,807
|
|
|
82
|
%
|
||
Diluted net earnings per common share
|
3.81
|
|
|
2.03
|
|
|
88
|
%
|
||
Diluted net earnings per share from continuing operations
|
1.93
|
|
|
1.97
|
|
|
(2
|
)%
|
||
Core net earnings per common share
|
2.11
|
|
|
2.02
|
|
|
4
|
%
|
||
|
||||||||||
|
Six Months Ended December 31
|
|||||||||
COMPARISONS AS A % OF NET SALES
|
2016
|
|
2015
|
|
Basis Pt Chg
|
|||||
Gross profit
|
50.9%
|
|
50.3%
|
|
60
|
|||||
Selling, general & administrative expense
|
27.9%
|
|
27.5%
|
|
40
|
|||||
Operating income
|
22.9%
|
|
22.8%
|
|
10
|
|||||
Earnings from continuing operations before income taxes
|
21.0%
|
|
22.3%
|
|
(130)
|
|||||
Net earnings from continuing operations
|
16.3%
|
|
17.0%
|
|
(70)
|
|||||
Net earnings attributable to Procter & Gamble
|
31.7%
|
|
17.4%
|
|
1,430
|
|
Net Sales Change Drivers 2016 vs. 2015 (Six Months Ended December 31)*
|
||||||||||||
|
Volume with Acquisitions & Divestitures
|
|
Volume Excluding Acquisitions & Divestitures
|
|
Foreign Exchange
|
|
Price
|
|
Mix
|
|
Other**
|
|
Net Sales 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%
|
|
—%
|
|
Three Months Ended December 31, 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
|
$
|
2,942
|
|
|
(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
|
)%
|
|
Six Months Ended December 31, 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
|
$
|
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
|
)%
|
•
|
Volume in Hair Care
decreased low single digits
due to minor brand divestitures. Organic volume increased low single digits. Developed market volume was unchanged and developing markets declined low single digits due to minor brand divestitures. Organic volume increased mid-single digits in developing markets behind product innovation, increased marketing spending and market growth. Global market share of the Hair Care category
decreased more than a point
.
|
•
|
Volume in Skin and Personal Care
decreased low single digits
. Volume decreased low single digits in developed regions due to reductions in customer trade inventory and competitive activity. Volume increased low single digits in developing regions due to product innovation and increased marketing. Global market share of the Skin and Personal Care category
decreased more than half a point
.
|
•
|
Volume in Hair Care
decreased low single digits
due to minor brand divestitures. Organic volume increased low single digits. Developed markets declined low single digits due to competitive activity and developing markets declined low single digits due to minor brand divestitures. Organic volume increased low single digits in developing markets behind product innovation, increased marketing and market growth. Global market share of the Hair Care category
decreased a point
.
|
•
|
Volume in Skin and Personal Care
was unchanged
in both developed and developing markets including the impact of minor brand divestitures.
Organic volume was up low single digits in developing markets and globally behind innovation, increased marketing and market growth. Global market share of the Skin and Personal Care category
decreased half a point
.
|
•
|
Shave Care volume
increased low single digits
.
Shave Care volume decreased low single digits in developed regions due to competitive activity and increased mid-single digits in developing regions behind product innovation and increased marketing support. Organic volume increased high single digits in developing regions. Global market share of the Shave Care category
decreased more than half a point
.
|
•
|
Volume in Appliances
increased mid-single digits
.
Volume was up mid-single digits in developed regions and high single digits in developing regions due to product innovation and market growth. Global market share of the Appliances category
increased more than half a point
.
|
•
|
Shave Care volume
increased low single digits
. Shave Care volume decreased low single digits in developed regions due to competitive activity and increased low single digits in developing regions behind product innovation and increased marketing support. Organic volume increased high single digits in developing regions. Global market share of the Shave Care category
decreased slightly
.
|
•
|
Volume in Appliances
increased mid-single digits
. Volume was up mid-single digits in both developed and developing regions due to product innovation. Global market share of the Appliances category
was unchanged
.
|
•
|
Oral Care volume
increased mid-single digits
.
Volume increased low single digits in developed regions and high single digits in developing regions driven by market growth and product innovation. Global market share of the Oral Care category
decreased less than half a point
.
|
•
|
Volume in Personal Health Care
was unchanged
with mid-single-digit growth in developed regions behind market growth offset by a mid-single digit decline in developing regions due to reduced distributor inventory and minor brand divestitures. Global market share of the Personal Health Care category
was unchanged
.
|
•
|
Oral Care volume
increased mid-single digits
in both developed and developing regions driven by market growth and product innovation. Global market share of the Oral Care category
decreased less than half a point
.
|
•
|
Volume in Personal Health Care
increased low single digits
with low single-digit growth in developed regions and mid-single-digit growth in developing regions behind market growth, product innovation and expanded distribution. Global market share of the Personal Health Care category
decreased slightly
.
|
•
|
Fabric Care volume
increased low single digits
as a mid-single-digit increase in developed markets due to innovation and increased marketing spending was partially offset by a mid-single-digit decrease in developing regions driven primarily by reduced distribution of less profitable brands. Global market share of the Fabric Care category
was unchanged
.
|
•
|
Home Care volume
was unchanged
.
Developed market volume was unchanged while developing regions decreased low single digits due to minor brand divestitures. Organic volume in developing regions was unchanged. Global market share of the Home Care category
increased slightly
.
|
•
|
Fabric Care volume
increased low single digits
as a mid-single-digit increase in developed markets due to innovation and increased marketing spending was partially offset by a low single-digit decrease in developing regions driven by competitive activity and reduced distribution of less profitable brands. Global market share of the Fabric Care category
was unchanged
.
|
•
|
Home Care volume
increased low single digits
driven by a low single-digit increase in developed markets due to product innovation, partially offset by a low single-digit decrease in developing regions due to minor brand divestitures. Organic volume in developing regions increased low single digits due to product innovation. Global market share of the Home Care category
increased slightly
.
|
•
|
Volume in Baby Care
increased low single digits
caused by a mid-single-digit increase in developing regions due to market growth and product innovation. Volume decreased low single digits in developed regions due to competitive activity. Global market share of the Baby Care category
decreased half a point
.
|
•
|
Volume in Feminine Care
decreased low single digits
. Volume decreased low-single-digits in developing regions due to reduced exports to our Venezuelan subsidiaries. Volume in developed regions increased low single digits due to product innovation and market growth. Global market share of the Feminine Care category
decreased slightly
.
|
•
|
Volume in Family Care, which is predominantly a North American business,
increased mid-single digits
driven by product innovation, increased distribution and increased merchandising. In the U.S., all-outlet share of the Family Care category
increased more than a point
.
|
•
|
Volume in Baby Care
increased low single digits
caused by a mid-single-digit increase in developing regions due to market growth, product innovation and decreased pricing. Volume decreased low single digits in developed regions due to competitive activity. Global market share of the Baby Care category
decreased nearly half a point
.
|
•
|
Volume in Feminine Care
increased low single digits
due to a low single-digit increase in developed regions driven by product innovation and market growth. Developing region volume was unchanged. Global market share of the Feminine Care category
decreased less than half a point
.
|
•
|
Volume in Family Care, which is predominantly a North America business,
increased mid-single digits
driven by market growth, product innovation and increased merchandising. In the U.S., all-outlet share of the family care category
was unchanged
.
|
Three Months Ended December 31, 2016
|
Net Sales Growth
|
|
Foreign Exchange Impact
|
|
Acquisition/Divestiture Impact*
|
|
Organic Sales Growth
|
Beauty
|
(1)%
|
|
2%
|
|
2%
|
|
3%
|
Grooming
|
(1)%
|
|
2%
|
|
—%
|
|
1%
|
Health Care
|
5%
|
|
2%
|
|
—%
|
|
7%
|
Fabric & Home Care
|
(1)%
|
|
2%
|
|
—%
|
|
1%
|
Baby, Feminine & Family Care
|
(1)%
|
|
2%
|
|
—%
|
|
1%
|
Total Company
|
—%
|
|
2%
|
|
—%
|
|
2%
|
Six Months Ended December 31, 2016
|
Net Sales Growth
|
|
Foreign Exchange Impact
|
|
Acquisition/Divestiture Impact*
|
|
Organic Sales Growth
|
Beauty
|
(1)%
|
|
2%
|
|
2%
|
|
3%
|
Grooming
|
(1)%
|
|
2%
|
|
1%
|
|
2%
|
Health Care
|
4%
|
|
2%
|
|
1%
|
|
7%
|
Fabric & Home Care
|
—%
|
|
2%
|
|
1%
|
|
3%
|
Baby, Feminine & Family Care
|
(1)%
|
|
2%
|
|
1%
|
|
2%
|
Total Company
|
—%
|
|
2%
|
|
—%
|
|
2%
|
Fiscal Year-to-Date, December 31, 2016
|
||||||||
Operating Cash Flow
|
|
Capital Spending
|
|
Free Cash Flow
|
|
Cash Tax Payment - Beauty Sale
|
|
Adjusted Free Cash Flow
|
$6,025
|
|
$(1,429)
|
|
$4,596
|
|
$129
|
|
$4,725
|
Fiscal Year-to-Date, December 31, 2016
|
||||||||||
Adjusted Free Cash Flow
|
|
Net Earnings
|
|
Loss on Early Debt Extinguishment
|
|
Gain on Sale of Beauty Brands
|
|
Adjusted Net Earnings
|
|
Adjusted Free Cash Flow Productivity
|
$4,725
|
|
$10,653
|
|
$345
|
|
$(5,335)
|
|
$5,663
|
|
83%
|
CHANGE VERSUS YEAR AGO
|
|
|
|
CORE EPS
|
4
|
%
|
|
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures |
||||||||||||||
Three Months Ended December 31, 2015
|
||||||||||||||
|
AS REPORTED (GAAP)
|
|
DISCONTINUED OPERATIONS
|
|
INCREMENTAL RESTRUCTURING
|
|
ROUNDING
|
|
NON-GAAP (CORE)
|
|||||
COST OF PRODUCTS SOLD
|
8,460
|
|
|
—
|
|
|
(143
|
)
|
|
—
|
|
|
8,317
|
|
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE
|
4,602
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
4,616
|
|
OPERATING INCOME
|
3,853
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
3,982
|
|
INCOME TAX ON CONTINUING OPERATIONS
|
898
|
|
|
—
|
|
|
30
|
|
|
(1
|
)
|
|
927
|
|
NET EARNINGS ATTRIBUTABLE TO P&G
|
3,206
|
|
|
(323
|
)
|
|
99
|
|
|
1
|
|
|
2,983
|
|
|
|
|
|
|
|
|
|
|
Core EPS:
|
|||||
DILUTED NET EARNINGS PER COMMON SHARE*
|
1.12
|
|
|
(0.11
|
)
|
|
0.03
|
|
|
—
|
|
|
1.04
|
|
CHANGE VERSUS YEAR AGO
|
|
|
|
CORE EPS
|
4
|
%
|
|
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures |
||||||||||||||
Six Months Ended December 31, 2015
|
||||||||||||||
|
AS REPORTED (GAAP)
|
|
DISCONTINUED OPERATIONS
|
|
INCREMENTAL RESTRUCTURING
|
|
ROUNDING
|
|
NON-GAAP (CORE)
|
|||||
COST OF PRODUCTS SOLD
|
16,612
|
|
|
—
|
|
|
(215
|
)
|
|
—
|
|
|
16,397
|
|
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE
|
9,209
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
9,223
|
|
OPERATING INCOME
|
7,621
|
|
|
—
|
|
|
201
|
|
|
—
|
|
|
7,822
|
|
INCOME TAX ON CONTINUING OPERATIONS
|
1,775
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
1,819
|
|
NET EARNINGS ATTRIBUTABLE TO P&G
|
5,807
|
|
|
(181
|
)
|
|
157
|
|
|
—
|
|
|
5,783
|
|
|
|
|
|
|
|
|
|
|
Core EPS:
|
|||||
DILUTED NET EARNINGS PER COMMON SHARE*
|
2.03
|
|
|
(0.06
|
)
|
|
0.05
|
|
|
—
|
|
|
2.02
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
ordering and managing materials from suppliers;
|
•
|
converting materials to finished products;
|
•
|
shipping products to customers;
|
•
|
marketing and selling products to consumers;
|
•
|
collecting, transferring, storing and/or processing customer, consumer, employee, vendor, investor, regulatory, and other stakeholder information and personal data;
|
•
|
summarizing and reporting results of operations, including financial reporting;
|
•
|
hosting, processing and sharing, as appropriate, confidential and proprietary research, business plans and financial information;
|
•
|
collaborating via an online and efficient means of global business communications;
|
•
|
complying with regulatory, legal and tax requirements;
|
•
|
providing data security; and
|
•
|
handling other processes necessary to manage our business.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
(2)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(3)
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under our Share Repurchase Program
|
||
10/01/2016 - 10/31/2016
|
104,969,205
|
|
|
$89.75
|
|
104,969,205
|
|
|
(3)
|
11/01/2016 - 11/30/2016
|
8,888,969
|
|
|
$84.37
|
|
8,888,969
|
|
|
(3)
|
12/01/2016 - 12/31/2016
|
8,928,892
|
|
|
$84.00
|
|
8,928,892
|
|
|
(3)
|
Total
|
122,787,066
|
|
|
$88.94
|
|
122,787,066
|
|
|
|
(1)
|
All transactions were made in the open market with large financial institutions or as part of the share exchange in the Beauty Brands transaction. The Beauty Brands transaction was completed on October 1, 2016, and the Company received 104,969,205 shares in the exchange. This table excludes shares withheld from employees to satisfy minimum tax withholding requirements on option exercises and other equity-based transactions. The Company administers cashless exercises through an independent third party and does not repurchase stock in connection with cashless exercises.
|
(2)
|
Average price paid per share for open market transactions is calculated on a settlement basis and excludes commission. Shares received as part of the Beauty Brands transaction have a price of $89.75 per share reflecting P&G's closing stock price on September 30, 2016.
|
(3)
|
On August 2, 2016, the Company stated that in fiscal year 2017 the Company expects to reduce outstanding shares at a value of approximately $15 billion, through a combination of direct share repurchase and shares that will be exchanged in the Beauty Brands transaction, notwithstanding any purchases under the Company's compensation and benefit plans. Purchases may be made in the open market and/or private transactions and purchases may be increased, decreased or discontinued at any time without prior notice. The share repurchases are authorized pursuant to a resolution issued by the Company's Board of Directors and are expected to be financed by a combination of operating cash flows and issuance of long-term and short-term debt.
|
Item 6.
|
Exhibits
|
*
|
|
Compensatory plan or arrangement
|
|
|
|
+
|
|
Filed herewith
|
|
|
|
(1
|
)
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
|
|
|
|
|
|
|
|
|
THE PROCTER & GAMBLE COMPANY
|
|
|
|
|
|
January 20, 2017
|
|
|
|
/s/ VALARIE L. SHEPPARD
|
Date
|
|
|
|
(Valarie L. Sheppard)
|
|
|
|
|
Senior Vice President, Comptroller and Treasurer
|
+
|
|
Filed herewith
|
|
|
|
(1
|
)
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
1 Year Procter and Gamble Chart |
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