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 September 30 | |||||||
Amounts in millions except per share amounts | 2016 | 2015 | |||||
NET SALES | $ | 16,518 | $ | 16,527 | |||
Cost of products sold | 8,102 | 8,152 | |||||
Selling, general and administrative expense | 4,645 | 4,607 | |||||
OPERATING INCOME | 3,771 | 3,768 | |||||
Interest expense | 131 | 140 | |||||
Interest income | 35 | 44 | |||||
Other non-operating income/(loss), net | 63 | (18 | ) | ||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 3,738 | 3,654 | |||||
Income taxes on continuing operations | 863 | 877 | |||||
NET EARNINGS FROM CONTINUING OPERATIONS | 2,875 | 2,777 | |||||
NET EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS | (118 | ) | (142 | ) | |||
NET EARNINGS | 2,757 | 2,635 | |||||
Less: Net earnings attributable to noncontrolling interests | 43 | 34 | |||||
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE | $ | 2,714 | $ | 2,601 | |||
BASIC NET EARNINGS PER COMMON SHARE: (1) | |||||||
Earnings from continuing operations | $ | 1.03 | $ | 0.98 | |||
Earnings/(loss) from discontinued operations | (0.04 | ) | (0.05 | ) | |||
BASIC NET EARNINGS PER COMMON SHARE | 0.99 | 0.93 | |||||
DILUTED NET EARNINGS PER COMMON SHARE: (1) | |||||||
Earnings from continuing operations | $ | 1.00 | $ | 0.96 | |||
Earnings/(loss) from discontinued operations | (0.04 | ) | (0.05 | ) | |||
DILUTED NET EARNINGS PER COMMON SHARE | 0.96 | 0.91 | |||||
DIVIDENDS PER COMMON SHARE | $ | 0.670 | $ | 0.663 | |||
Diluted weighted average common shares outstanding | 2,822.9 | 2,867.5 |
(1) | Basic net earnings per share and Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble. |
Three Months Ended September 30 | |||||||
Amounts in millions | 2016 | 2015 | |||||
NET EARNINGS | $ | 2,757 | $ | 2,635 | |||
OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX | |||||||
Financial statement translation | (1 | ) | (1,023 | ) | |||
Unrealized gains/(losses) on hedges | (115 | ) | (42 | ) | |||
Unrealized gains/(losses) on investment securities | (13 | ) | 8 | ||||
Unrealized gains/(losses) on defined benefit retirement plans | 93 | 91 | |||||
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX | (36 | ) | (966 | ) | |||
TOTAL COMPREHENSIVE INCOME/(LOSS) | 2,721 | 1,669 | |||||
Less: Total comprehensive income attributable to noncontrolling interests | 43 | 34 | |||||
TOTAL COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO PROCTER & GAMBLE | $ | 2,678 | $ | 1,635 |
Amounts in millions | September 30, 2016 | June 30, 2016 | ||||||||||
Assets | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 7,456 | $ | 7,102 | ||||||||
Restricted cash | 1,870 | — | ||||||||||
Available-for-sale investment securities | 6,615 | 6,246 | ||||||||||
Accounts receivable | 4,713 | 4,373 | ||||||||||
INVENTORIES | ||||||||||||
Materials and supplies | 1,380 | 1,188 | ||||||||||
Work in process | 549 | 563 | ||||||||||
Finished goods | 3,070 | 2,965 | ||||||||||
Total inventories | 4,999 | 4,716 | ||||||||||
Deferred income taxes | — | 1,507 | ||||||||||
Prepaid expenses and other current assets | 2,447 | 2,653 | ||||||||||
Current assets held for sale | 7,071 | 7,185 | ||||||||||
TOTAL CURRENT ASSETS | 35,171 | 33,782 | ||||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 19,310 | 19,385 | ||||||||||
GOODWILL | 44,458 | 44,350 | ||||||||||
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET | 24,429 | 24,527 | ||||||||||
OTHER NONCURRENT ASSETS | 5,675 | 5,092 | ||||||||||
TOTAL ASSETS | $ | 129,043 | $ | 127,136 | ||||||||
Liabilities and Shareholders' Equity | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Accounts payable | $ | 9,024 | $ | 9,325 | ||||||||
Accrued and other liabilities | 8,032 | 7,449 | ||||||||||
Current liabilities held for sale | 3,130 | 2,343 | ||||||||||
Debt due within one year | 12,215 | 11,653 | ||||||||||
TOTAL CURRENT LIABILITIES | 32,401 | 30,770 | ||||||||||
LONG-TERM DEBT | 18,910 | 18,945 | ||||||||||
DEFERRED INCOME TAXES | 8,515 | 9,113 | ||||||||||
OTHER NONCURRENT LIABILITIES | 10,266 | 10,325 | ||||||||||
TOTAL LIABILITIES | 70,092 | 69,153 | ||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||
Preferred stock | 1,029 | 1,038 | ||||||||||
Common stock – shares issued – | September 2016 | 4,009.2 | ||||||||||
June 2016 | 4,009.2 | 4,009 | 4,009 | |||||||||
Additional paid-in capital | 63,553 | 63,714 | ||||||||||
Reserve for ESOP debt retirement | (1,271 | ) | (1,290 | ) | ||||||||
Accumulated other comprehensive income/(loss) | (15,943 | ) | (15,907 | ) | ||||||||
Treasury stock | (81,970 | ) | (82,176 | ) | ||||||||
Retained earnings | 88,855 | 87,953 | ||||||||||
Noncontrolling interest | 689 | 642 | ||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 58,951 | 57,983 | ||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 129,043 | $ | 127,136 |
Three Months Ended September 30 | |||||||
Amounts in millions | 2016 | 2015 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | $ | 7,102 | $ | 6,836 | |||
OPERATING ACTIVITIES | |||||||
Net earnings | 2,757 | 2,635 | |||||
Depreciation and amortization | 728 | 731 | |||||
Share-based compensation expense | 44 | 67 | |||||
Deferred income taxes | (177 | ) | 89 | ||||
Gain on sale of businesses | (75 | ) | (7 | ) | |||
Goodwill and intangible asset impairment charges | — | 402 | |||||
Changes in: | |||||||
Accounts receivable | (424 | ) | (368 | ) | |||
Inventories | (287 | ) | (519 | ) | |||
Accounts payable, accrued and other liabilities | 298 | 298 | |||||
Other operating assets and liabilities | 135 | 141 | |||||
Other | 26 | 69 | |||||
TOTAL OPERATING ACTIVITIES | 3,025 | 3,538 | |||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (684 | ) | (532 | ) | |||
Proceeds from asset sales | 183 | 38 | |||||
Acquisitions, net of cash acquired | (14 | ) | — | ||||
Purchases of short-term investments | (631 | ) | (494 | ) | |||
Proceeds from sales of short-term investments | 243 | 418 | |||||
Cash transferred to discontinued Beauty Brands business | (348 | ) | — | ||||
Restricted cash related to Beauty Brands divestiture | (874 | ) | — | ||||
Change in other investments | 4 | 24 | |||||
TOTAL INVESTING ACTIVITIES | (2,121 | ) | (546 | ) | |||
FINANCING ACTIVITIES | |||||||
Dividends to shareholders | (1,851 | ) | (1,865 | ) | |||
Change in short-term debt | 1,519 | 450 | |||||
Additions to long-term debt | 891 | — | |||||
Reductions of long-term debt | (1,001 | ) | (537 | ) | |||
Treasury stock purchases | (1,002 | ) | (502 | ) | |||
Impact of stock options and other | 937 | 483 | |||||
TOTAL FINANCING ACTIVITIES | (507 | ) | (1,971 | ) | |||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (43 | ) | (152 | ) | |||
CHANGE IN CASH AND CASH EQUIVALENTS | 354 | 869 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 7,456 | $ | 7,705 |
Three Months Ended September 30 | |||||||||||||
Net Sales | Earnings/(Loss) from Continuing Operations Before Income Taxes | Net Earnings/(Loss) from Continuing Operations | |||||||||||
Beauty | 2016 | $ | 2,996 | $ | 783 | $ | 592 | ||||||
2015 | 3,041 | 822 | 624 | ||||||||||
Grooming | 2016 | 1,658 | 529 | 415 | |||||||||
2015 | 1,674 | 499 | 390 | ||||||||||
Health Care | 2016 | 1,861 | 496 | 320 | |||||||||
2015 | 1,796 | 448 | 318 | ||||||||||
Fabric & Home Care | 2016 | 5,302 | 1,129 | 728 | |||||||||
2015 | 5,251 | 1,120 | 747 | ||||||||||
Baby, Feminine & Family Care | 2016 | 4,595 | 1,045 | 697 | |||||||||
2015 | 4,658 | 1,111 | 749 | ||||||||||
Corporate | 2016 | 106 | (244 | ) | 123 | ||||||||
2015 | 107 | (346 | ) | (51 | ) | ||||||||
Total Company | 2016 | $ | 16,518 | $ | 3,738 | $ | 2,875 | ||||||
2015 | 16,527 | 3,654 | 2,777 |
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 | 52 | 39 | 14 | 2 | 14 | 121 | |||||||||||||||||
Goodwill at September 30, 2016 | $ | 12,697 | $ | 19,516 | $ | 5,844 | $ | 1,855 | $ | 4,546 | $ | 44,458 |
Gross Carrying Amount | Accumulated Amortization | ||||||
Intangible assets with determinable lives | $ | 7,637 | $ | (4,890 | ) | ||
Intangible assets with indefinite lives | 21,682 | — | |||||
Total identifiable intangible assets | $ | 29,319 | $ | (4,890 | ) |
Three Months Ended September 30, 2016 | Three Months Ended September 30, 2015 | ||||||||||||||||||
CONSOLIDATED AMOUNTS | Continuing Operations | Discontinued Operations | Total | Continuing Operations | Discontinued Operations | Total | |||||||||||||
Net earnings/(loss) | $ | 2,875 | $ | (118 | ) | $ | 2,757 | $ | 2,777 | $ | (142 | ) | $ | 2,635 | |||||
Net earnings attributable to noncontrolling interests | (43 | ) | — | (43 | ) | (34 | ) | — | (34 | ) | |||||||||
Net earnings/(loss) attributable to P&G (Diluted) | 2,832 | (118 | ) | 2,714 | 2,743 | (142 | ) | 2,601 | |||||||||||
Preferred dividends, net of tax benefit | (63 | ) | — | (63 | ) | (65 | ) | — | (65 | ) | |||||||||
Net earnings/(loss) attributable to P&G available to common shareholders (Basic) | $ | 2,769 | $ | (118 | ) | $ | 2,651 | $ | 2,678 | $ | (142 | ) | $ | 2,536 | |||||
SHARES IN MILLIONS | |||||||||||||||||||
Basic weighted average common shares outstanding | 2,674.7 | 2,674.7 | 2,674.7 | 2,720.1 | 2,720.1 | 2,720.1 | |||||||||||||
Effect of dilutive securities | |||||||||||||||||||
Conversion of preferred shares (1) | 101.0 | 101.0 | 101.0 | 105.7 | 105.7 | 105.7 | |||||||||||||
Exercise of stock options and other unvested equity awards (2) | 47.2 | 47.2 | 47.2 | 41.7 | 41.7 | 41.7 | |||||||||||||
Diluted weighted average common shares outstanding | 2,822.9 | 2,822.9 | 2,822.9 | 2,867.5 | 2,867.5 | 2,867.5 | |||||||||||||
PER SHARE AMOUNTS (3) | |||||||||||||||||||
Basic net earnings/(loss) per common share | $ | 1.03 | $ | (0.04 | ) | $ | 0.99 | $ | 0.98 | $ | (0.05 | ) | $ | 0.93 | |||||
Diluted net earnings/(loss) per common share | $ | 1.00 | $ | (0.04 | ) | $ | 0.96 | $ | 0.96 | $ | (0.05 | ) | $ | 0.91 |
(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 26 million and 69 million for the three months ended September 30, 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/(loss) attributable to Procter & Gamble. |
Three Months Ended September 30 | |||||||
2016 | 2015 | ||||||
Share-based compensation expense | $ | 44 | $ | 66 | |||
Net periodic benefit cost for pension benefits (1) | 96 | 86 | |||||
Net periodic benefit cost/(credit) for other retiree benefits (1) | (19 | ) | (24 | ) |
(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 | |||||||
September 30, 2016 | June 30, 2016 | ||||||
Investments | |||||||
U.S. government securities | $ | 4,826 | $ | 4,839 | |||
Corporate bond securities | 1,789 | 1,407 | |||||
Other investments | 29 | 28 | |||||
Total | $ | 6,644 | $ | 6,274 |
Notional Amount | Fair Value Asset/(Liability) | ||||||||||||||
September 30, 2016 | June 30, 2016 | September 30, 2016 | June 30, 2016 | ||||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||||||
Foreign currency contracts | $ | 798 | $ | 798 | $ | 18 | $ | 31 | |||||||
Derivatives in Fair Value Hedging Relationships | |||||||||||||||
Interest rate contracts | $ | 5,013 | $ | 4,993 | $ | 343 | $ | 371 | |||||||
Derivatives in Net Investment Hedging Relationships | |||||||||||||||
Net investment hedges | $ | 3,013 | $ | 3,013 | $ | (121 | ) | $ | (87 | ) | |||||
Derivatives Not Designated as Hedging Instruments | |||||||||||||||
Foreign currency contracts | $ | 4,641 | $ | 6,482 | $ | (20 | ) | $ | (10 | ) |
Amount of Gain/(Loss) Recognized in AOCI on Derivatives (Effective Portion) | |||||||
September 30, 2016 | June 30, 2016 | ||||||
Derivatives in Cash Flow Hedging Relationships | |||||||
Interest rate contracts | $ | (2 | ) | $ | (2 | ) | |
Foreign currency contracts | (2 | ) | — | ||||
Total | $ | (4 | ) | $ | (2 | ) | |
Derivatives in Net Investment Hedging Relationships | |||||||
Net investment hedges | $ | (74 | ) | $ | (53 | ) |
Amount of Gain/(Loss) Reclassified from AOCI into Earnings | |||||||
Three Months Ended September 30 | |||||||
2016 | 2015 | ||||||
Derivatives in Cash Flow Hedging Relationships (1) | |||||||
Interest rate contracts | $ | — | $ | 2 | |||
Foreign currency contracts | (8 | ) | (9 | ) | |||
Total | $ | (8 | ) | $ | (7 | ) | |
Amount of Gain/(Loss) Recognized in Earnings | |||||||
Three Months Ended September 30 | |||||||
2016 | 2015 | ||||||
Derivatives in Fair Value Hedging Relationships (2) | |||||||
Interest rate contracts | $ | (28 | ) | $ | 89 | ||
Debt | 28 | (89 | ) | ||||
Total | $ | — | $ | — | |||
Derivatives in Net Investment Hedging Relationships (2) | |||||||
Net investment hedges | $ | — | $ | — | |||
Derivatives Not Designated as Hedging Instruments (3) | |||||||
Foreign currency contracts | $ | (8 | ) | $ | (62 | ) |
(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) | (123 | ) | (10 | ) | 1 | (1 | ) | (133 | ) | ||||||||||
Amounts reclassified from AOCI (2) (3) | 8 | (3 | ) | 92 | — | 97 | |||||||||||||
Net current period OCI | (115 | ) | (13 | ) | 93 | (1 | ) | (36 | ) | ||||||||||
Balance at September 30, 2016 | $ | (2,756 | ) | $ | 21 | $ | (5,705 | ) | $ | (7,503 | ) | $ | (15,943 | ) |
(1) | Net of tax expense/(benefit) of $(68), $(4) and $9 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 $35 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. |
Three Months Ended September 30, 2016 | |||||||||||||||||||
Accrual Balance June 30, 2016 | Charges | Cash Spent | Charges Against Assets | Accrual Balance September 30, 2016 | |||||||||||||||
Separations | $ | 243 | $ | 47 | $ | (41 | ) | $ | — | $ | 249 | ||||||||
Asset-related costs | — | 105 | — | (105 | ) | — | |||||||||||||
Other costs | 72 | 16 | (30 | ) | — | 58 | |||||||||||||
Total | $ | 315 | $ | 168 | $ | (71 | ) | $ | (105 | ) | $ | 307 |
Three Months Ended September 30, 2016 | |||
Beauty | $ | 19 | |
Grooming | 5 | ||
Health Care | 4 | ||
Fabric & Home Care | 27 | ||
Baby, Feminine & Family Care | 54 | ||
Corporate (1) | 59 | ||
Total Company | $ | 168 |
(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 September 30 | |||||||
2016 | 2015 | ||||||
Beauty Brands | $ | (118 | ) | $ | 150 | ||
Batteries | — | (292 | ) | ||||
Net earnings/(loss) from discontinued operations | $ | (118 | ) | $ | (142 | ) |
Beauty Brands | |||||||
Three Months Ended September 30 | |||||||
2016 | 2015 | ||||||
Net sales | $ | 1,159 | $ | 1,219 | |||
Cost of products sold | 450 | 385 | |||||
Selling, general and administrative expense | 783 | 647 | |||||
Interest expense | 14 | — | |||||
Other non-operating income/(loss), net | 16 | 1 | |||||
Earnings/(loss) from discontinued operations before income taxes | $ | (72 | ) | $ | 188 | ||
Income taxes on discontinued operations | 46 | 38 | |||||
Net earnings/(loss) from discontinued operations | $ | (118 | ) | $ | 150 |
Beauty Brands | |||||||
Three Months Ended September 30 | |||||||
2016 | 2015 | ||||||
NON-CASH OPERATING ITEMS | |||||||
Depreciation and amortization | $ | 24 | $ | 28 | |||
Gain on sale of business | 13 | — | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Capital expenditures | $ | 38 | $ | 18 |
Beauty Brands | |||||||
September 30, 2016 | June 30, 2016 | ||||||
Cash | $ | 387 | $ | 40 | |||
Restricted cash | — | 996 | |||||
Accounts receivable | 475 | 384 | |||||
Inventories | 500 | 494 | |||||
Prepaid expenses and other current assets | 178 | 126 | |||||
Property, plant and equipment, net | 627 | 629 | |||||
Goodwill and intangible assets, net | 4,426 | 4,411 | |||||
Other noncurrent assets | 478 | 105 | |||||
Current assets held for sale | $ | 7,071 | $ | 7,185 | |||
Accounts payable | $ | 171 | $ | 148 | |||
Accrued and other liabilities | 342 | 384 | |||||
Noncurrent deferred tax liabilities | 337 | 370 | |||||
Long-term debt | 1,887 | 996 | |||||
Other noncurrent liabilities | 393 | 445 | |||||
Current liabilities held for sale | $ | 3,130 | $ | 2,343 |
Batteries | |||
Three Months Ended September 30, 2015 | |||
Net sales | $ | 506 | |
Earnings before impairment charges and income taxes | 93 | ||
Impairment charges | (402 | ) | |
Income tax (expense)/benefit | 17 | ||
Net earnings/(loss) from discontinued operations | $ | (292 | ) |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
• | Overview |
• | Summary of Results – Three Months Ended September 30, 2016 |
• | Economic Conditions and Uncertainties |
• | Results of Operations – Three Months Ended September 30, 2016 |
• | Business Segment Discussion – Three Months Ended September 30, 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 September 30, 2016 | |||
Net Sales | Net Earnings | ||
Beauty | 18% | 22% | |
Grooming | 10% | 15% | |
Health Care | 12% | 12% | |
Fabric & Home Care | 32% | 26% | |
Baby, Feminine & Family Care | 28% | 25% | |
Total Company | 100% | 100% |
• | Net sales were unchanged versus the previous year at $16.5 billion. Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange, increased 3%. Organic sales increased 3% in Beauty and in Grooming, 7% in Health Care, 4% in Fabric & Home Care and 2% in Baby, Feminine & Family Care. |
• | Unit volume increased 2% with organic volume up 3%. Volume increased mid-single digits in Health Care and low single digits in Fabric & Home Care and in Baby, Feminine & Family Care. Volume was unchanged in Grooming and decreased low single digits in Beauty. Excluding the impacts of minor brand divestitures, organic volume increased low single digits in both Beauty and Grooming. |
• | Net earnings from continuing operations were $2.9 billion, an increase of $98 million, or 4% versus the prior year period. This increase was driven by an increase in other non-operating income due to minor brand divestitures and a lower effective tax rate. |
• | Diluted net earnings per share from continuing operations increased 4% to $1.00. |
• | Net earnings attributable to Procter & Gamble were $2.7 billion, an increase of $113 million, or 4% versus the prior year period, driven by the increase in net earnings from continuing operations. |
• | Core net earnings per share, which excludes discontinued operations and incremental restructuring charges, increased 5% to $1.03. |
• | Operating cash flow was $3.0 billion. Free cash flow, which is operating cash flow less capital expenditures, was $2.3 billion. Free cash flow productivity, which is the ratio of free cash flow to net earnings, was 85%. |
Three Months Ended September 30 | ||||||||||
Amounts in millions, except per share amounts | 2016 | 2015 | % Chg | |||||||
Net sales | $ | 16,518 | $ | 16,527 | — | % | ||||
Operating income | 3,771 | 3,768 | — | % | ||||||
Net earnings from continuing operations | 2,875 | 2,777 | 4 | % | ||||||
Net earnings/(loss) from discontinued operations | (118 | ) | (142 | ) | N/A | |||||
Net earnings attributable to Procter & Gamble | 2,714 | 2,601 | 4 | % | ||||||
Diluted net earnings per common share | 0.96 | 0.91 | 5 | % | ||||||
Diluted net earnings per share from continuing operations | 1.00 | 0.96 | 4 | % | ||||||
Core net earnings per common share | 1.03 | 0.98 | 5 | % | ||||||
Three Months Ended September 30 | ||||||||||
COMPARISONS AS A % OF NET SALES | 2016 | 2015 | Basis Pt Chg | |||||||
Gross profit | 51.0% | 50.7% | 30 | |||||||
Selling, general & administrative expense | 28.1% | 27.9% | 20 | |||||||
Operating income | 22.8% | 22.8% | — | |||||||
Earnings from continuing operations before income taxes | 22.6% | 22.1% | 50 | |||||||
Net earnings from continuing operations | 17.4% | 16.8% | 60 | |||||||
Net earnings attributable to Procter & Gamble | 16.4% | 15.7% | 70 |
Net Sales Change Drivers 2016 vs. 2015 (Three Months Ended September 30)* | |||||||||||||
Volume with Acquisitions & Divestitures | Volume Excluding Acquisitions & Divestitures | Foreign Exchange | Price | Mix | Other** | Net Sales Growth | |||||||
Beauty | (2)% | 2% | (2)% | 1% | 1% | 1% | (1)% | ||||||
Grooming | —% | 3% | (3)% | 1% | —% | 1% | (1)% | ||||||
Health Care | 5% | 5% | (3)% | 1% | 1% | —% | 4% | ||||||
Fabric & Home Care | 2% | 4% | (2)% | (1)% | 1% | 1% | 1% | ||||||
Baby, Feminine & Family Care | 3% | 4% | (3)% | (1)% | (1)% | 1% | (1)% | ||||||
Total Company | 2% | 3% | (3)% | —% | —% | 1% | —% |
Three Months Ended September 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 | $ | 2,996 | (1 | )% | $ | 783 | (5 | )% | $ | 592 | (5 | )% | ||||||||
Grooming | 1,658 | (1 | )% | 529 | 6 | % | 415 | 6 | % | |||||||||||
Health Care | 1,861 | 4 | % | 496 | 11 | % | 320 | 1 | % | |||||||||||
Fabric & Home Care | 5,302 | 1 | % | 1,129 | 1 | % | 728 | (3 | )% | |||||||||||
Baby, Feminine & Family Care | 4,595 | (1 | )% | 1,045 | (6 | )% | 697 | (7 | )% | |||||||||||
Corporate | 106 | (1 | )% | (244 | ) | N/A | 123 | N/A | ||||||||||||
Total Company | $ | 16,518 | — | % | $ | 3,738 | 2 | % | $ | 2,875 | 4 | % |
• | Volume in Hair Care was down 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 market growth and increased marketing. Global market share of the Hair Care category decreased nearly a point. |
• | Volume in Skin and Personal Care increased low single digits. Volume increased low single digits in developed regions due to product innovation and increased promotional activity. Volume decreased low single digits in developing regions due to minor brand divestitures, with organic volume up low single digits behind innovation and increased marketing. Global market share of the Skin and Personal Care category decreased half a point. |
• | Shave Care volume was unchanged in both developed and developing regions as increased marketing support and product innovation were largely offset by competitive activity. Organic volume increased mid-single digits in developing regions. Global market share of the blades and razors category increased slightly. |
• | Volume in Appliances increased low single digits. Volume was up mid-single digits in developed regions and low single digits in developing regions due to product innovation and market growth. Global market share of the Appliances category decreased a point. |
• | Oral Care volume increased mid-single digits in developed regions and low single digits in developing regions driven by market growth and product innovation. Global market share of the Oral Care category decreased slightly. |
• | Volume in Personal Health Care increased high single digits with low single-digit growth in developed regions and double-digit growth in developing regions behind market growth, product innovation and expanded distribution. Global market share of the Personal Health Care category decreased nearly half a point. |
• | Fabric Care volume increased low single digits as a mid-single-digit increase in developed markets due to innovation and increased marketing spending were 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 mid-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 was up slightly. |
• | Volume in Baby Care increased low single digits caused by a high single-digit increase in developing regions due to market growth and decreased pricing. Volume decreased low single digits in developed regions due to competitive activity. Global market share of the Baby Care category decreased less than half a point. |
• | Volume in Feminine Care increased low single digits due to a mid-single-digit increase in developed regions and a low single-digit increase in developing regions, both due to product innovation and market growth. Global market share of the Feminine Care category decreased nearly half a point. |
• | Volume in Family Care, which is predominantly a North American 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 up less than half a point. |
Three Months Ended September 30, 2016 | Net Sales Growth | Foreign Exchange Impact | Acquisition/Divestiture Impact* | Organic Sales Growth | |||
Beauty | (1)% | 2% | 2% | 3% | |||
Grooming | (1)% | 3% | 1% | 3% | |||
Health Care | 4% | 3% | —% | 7% | |||
Fabric & Home Care | 1% | 2% | 1% | 4% | |||
Baby, Feminine & Family Care | (1)% | 3% | —% | 2% | |||
Total Company | —% | 3% | —% | 3% |
Fiscal Year-to-Date, September 30, 2016 | ||||||||
Operating Cash Flow | Capital Spending | Free Cash Flow | Net Earnings | Free Cash Flow Productivity | ||||
$3,025 | $(684) | $2,341 | $2,757 | 85% |
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures | ||||||||||||||
Three Months Ended September 30, 2016 | ||||||||||||||
AS REPORTED (GAAP) | DISCONTINUED OPERATIONS | INCREMENTAL RESTRUCTURING | ROUNDING | NON-GAAP (CORE) | ||||||||||
COST OF PRODUCTS SOLD | 8,102 | — | (111 | ) | — | 7,991 | ||||||||
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE | 4,645 | — | 23 | (1 | ) | 4,667 | ||||||||
OPERATING INCOME | 3,771 | — | 88 | 1 | 3,860 | |||||||||
INCOME TAX ON CONTINUING OPERATIONS | 863 | — | 15 | 1 | 879 | |||||||||
NET EARNINGS ATTRIBUTABLE TO P&G | 2,714 | 118 | 73 | — | 2,905 | |||||||||
Core EPS: | ||||||||||||||
DILUTED NET EARNINGS PER COMMON SHARE* | 0.96 | 0.04 | 0.03 | — | 1.03 |
CHANGE VERSUS YEAR AGO | |||
CORE EPS | 5 | % |
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures | ||||||||||||||
Three Months Ended September 30, 2015 | ||||||||||||||
AS REPORTED (GAAP) | DISCONTINUED OPERATIONS | INCREMENTAL RESTRUCTURING | ROUNDING | NON-GAAP (CORE) | ||||||||||
COST OF PRODUCTS SOLD | 8,152 | — | (72 | ) | — | 8,080 | ||||||||
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE | 4,607 | — | — | — | 4,607 | |||||||||
OPERATING INCOME | 3,768 | — | 72 | — | 3,840 | |||||||||
INCOME TAX ON CONTINUING OPERATIONS | 877 | — | 14 | 1 | 892 | |||||||||
NET EARNINGS ATTRIBUTABLE TO P&G | 2,601 | 142 | 58 | (1 | ) | 2,800 | ||||||||
Core EPS: | ||||||||||||||
DILUTED NET EARNINGS PER COMMON SHARE* | 0.91 | 0.05 | 0.02 | — | 0.98 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
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 ($ in billions) | ||||||
7/01/2016 - 7/31/2016 | 8,766,524 | $85.51 | 5,846,912 | (3) | ||||||
8/01/2016 - 8/31/2016 | 5,774,731 | $86.58 | 5,774,731 | (3) | ||||||
9/01/2016 - 9/30/2016 | — | — | — | (3) | ||||||
Total | 14,541,255 | $85.94 | 11,621,643 |
(1) | All transactions were made in the open market with large financial institutions. 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. |
(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 |
2-1 | Fourth Amendment to the Transaction Agreement dated as of July 8, 2015 among The Procter & Gamble Company, Coty Inc., Galleria Co. and Green Acquisition Sub Inc. + ** | ||
2-2 | Side Letter Amendment to the Transaction Agreement dated as of July 8, 2015 among The Procter & Gamble Company, Coty Inc., Galleria Co. and Green Acquisition Sub Inc. + ** | ||
3-1 | Amended Articles of Incorporation (as amended by shareholders at the annual meeting on October 11, 2011 and consolidated by the Board of Directors on April 8, 2016) (Incorporated by reference to Exhibit (3-1) of the Company's Form 10-K for the year ended June 30, 2016) | ||
3-2 | Regulations (as approved by the Board of Directors on April 8, 2016, pursuant to authority granted by shareholders at the annual meeting on October 13, 2009) (Incorporated by reference to Exhibit (3-2) of the Company's Form 10-K for the year ended June 30, 2016) | ||
10-1 | Company’s Form of Separation Agreement & Release * + | ||
10-2 | The Procter & Gamble 2014 Stock and Incentive Compensation Plan - Additional Terms and Conditions * + | ||
12 | Computation of Ratio of Earnings to Fixed Charges | ||
31.1 | Rule 13a-14(a)/15d-14(a) Certification – Chief Executive Officer | ||
31.2 | Rule 13a-14(a)/15d-14(a) Certification – Chief Financial Officer | ||
32.1 | Section 1350 Certifications – Chief Executive Officer | ||
32.2 | Section 1350 Certifications – Chief Financial Officer | ||
101.INS (1) | XBRL Instance Document | ||
101.SCH (1) | XBRL Taxonomy Extension Schema Document | ||
101.CAL (1) | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF (1) | XBRL Taxonomy Definition Linkbase Document | ||
101.LAB (1) | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE (1) | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Compensatory plan or arrangement | |
** | Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC, upon request, a copy of all omitted schedules and attachments. | |
+ | 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 | ||||
October 25, 2016 | /s/ VALARIE L. SHEPPARD | |||
Date | (Valarie L. Sheppard) | |||
Senior Vice President, Comptroller and Treasurer |
Exhibit | |||
2-1 | Fourth Amendment to the Transaction Agreement dated as of July 8, 2015 among The Procter & Gamble Company, Coty Inc., Galleria Co. and Green Acquisition Sub Inc. + ** | ||
2-2 | Side Letter Amendment to the Transaction Agreement dated as of July 8, 2015 among The Procter & Gamble Company, Coty Inc., Galleria Co. and Green Acquisition Sub Inc. + ** | ||
3-1 | Amended Articles of Incorporation (as amended by shareholders at the annual meeting on October 11, 2011 and consolidated by the Board of Directors on April 8, 2016) (Incorporated by reference to Exhibit (3-1) of the Company's Form 10-K for the year ended June 30, 2016) | ||
3-2 | Regulations (as approved by the Board of Directors on April 8, 2016, pursuant to authority granted by shareholders at the annual meeting on October 13, 2009) (Incorporated by reference to Exhibit (3-2) of the Company's Form 10-K for the year ended June 30, 2016) | ||
10-1 | Company’s Form of Separation Agreement & Release + | ||
10-2 | The Procter & Gamble 2014 Stock and Incentive Compensation Plan - Additional Terms and Conditions + | ||
12 | Computation of Ratio of Earnings to Fixed Charges | ||
31.1 | Rule 13a-14(a)/15d-14(a) Certification – Chief Executive Officer | ||
31.2 | Rule 13a-14(a)/15d-14(a) Certification – Chief Financial Officer | ||
32.1 | Section 1350 Certifications – Chief Executive Officer | ||
32.2 | Section 1350 Certifications – Chief Financial Officer | ||
101.INS (1) | XBRL Instance Document | ||
101.SCH (1) | XBRL Taxonomy Extension Schema Document | ||
101.CAL (1) | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF (1) | XBRL Taxonomy Definition Linkbase Document | ||
101.LAB (1) | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE (1) | XBRL Taxonomy Extension Presentation Linkbase Document |
** | Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC, upon request, a copy of all omitted schedules and attachments. | |
+ | 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. |
a. | Section 1.05(a)(xvii) of the Agreement is hereby deleted in its entirety and replaced with the following: |
b. | Section 5.21(e) of the Agreement is hereby deleted in its entirety and replaced with the following: |
c. | Section 1.05(b)(i) of the Parent Disclosure Letter is hereby amended such that the following disclosure will be added as a new item 11 under the “Mercury” heading: |
d. | Section 11.01(b) of the Parent Disclosure Letter is hereby amended so as to delete the text under the heading “Accounts Receivable, other” and replace such text with the following: |
e. | Article XI of the Agreement is hereby amended so as to add the following defined terms: |
a. | Section 1.05(a)(i) of the Parent Disclosure Letter is hereby amended such that the following disclosure is added as a new item 11: |
b. | The Parent Disclosure Letter is hereby amended to add Attachment A to this Amendment as a new Attachment 11-C to Section 1.05(a)(i) of the Parent Disclosure Letter. |
a. | Section 1.05(a)(x) of the Parent Disclosure Letter is hereby amended to add the following disclosure: |
FACILITY | WMS |
Gargenville 3PL | LM7 |
Aspropyrgos | Aberon |
Riverside | TOPS/KNAPP |
Cologne | LVS |
a. | Section 1.06(a)(vi) of the Agreement is hereby deleted in its entirety and replaced with the following: |
b. | Section 1.06(b)(i) of the Parent Disclosure Letter is hereby amended such that the following disclosure will be added as a new paragraph 2: |
c. | Section 11.01(b) of the Parent Disclosure Letter is hereby amended so as to delete the last sentence in the second paragraph under the heading “Trade accounts payable and accrued liabilities” and replace such text with the following: |
a. | Paragraph 4(b)(i) of Schedule 1.05(a)(xiii) of the Parent Disclosure Letter is hereby deleted in its entirety and replaced with the following: |
b. | Exhibit R to the Agreement is hereby amended to add the following: |
1. | Death Benefit according to Social benefits catalogue |
2. | Uberbruckungsgeld Muelhens (P&G Manufacturing Cologne only) |
3. | Belegschaftskasse Muelhens (P&G Manufacturing Cologne only) |
4. | German portion of the International Retirement Arrangement (IRA) / International Pension Protection Program (IPP) |
1. | Belgium portion of the International Retirement Arrangement (IRA) / International Pension Protection Program (IPP) |
1. | Early Retirement Allowance Plan (New Life Assistance Plan) - in force during Continuation Period |
1. | Legal Severance Payment Plan |
a. | Section 2.06 of the Agreement is hereby deleted in its entirety and replaced with the following: |
a. | Section 3.14(a) of the Parent Disclosure Letter is hereby amended so as to add the following text as a new item 20: |
a. | Section 5.21(j) of the Agreement is hereby deleted in its entirety and replaced with the following text: |
a. | 5.32 Panama Relocation. Prior to the Business Transfer Time, Parent will use Commercially Reasonable Efforts to relocate each In-Scope Employee located in Panama to a new location to be reasonably determined by Parent. To the extent any costs or expenses are incurred by Parent in connection with the foregoing (including any relocation, severance or termination pay or benefits), the Recapitalization Amount will be increased in an amount equal to such costs or expenses incurred by Parent (and, in respect of any such costs or expenses that have not been determined as of the 12th Business Day prior to the Business Transfer Time (including in respect of costs that have been incurred but not invoiced), the Recapitalization Amount will be adjusted by an amount equal to Parent’s good faith estimate of such undetermined costs). For the avoidance of doubt, the restrictions in Section 5.01(b)(xiv) will not apply to the relocation of In-Scope Employees described in this Section 5.32. |
a. | The Parent Disclosure Letter is hereby amended so as to add the following text as a new Section 5.33 of the Parent Disclosure Letter. |
b. | The Parent Disclosure Letter is hereby amended so as to add Attachment B to this Amendment as a new Attachment 1 to Section 5.33 of the Parent Disclosure Letter. |
a. | The Agreement is hereby amended so as to add the following as a new Section 5.34: |
a. | Clause (i) of Section 6.02(b) of the Agreement is hereby amended so as to add the following text after “pursuant to the transactions contemplated by this Agreement”: “(including the transactions contemplated by Section 6.02(f) below)”. |
b. | The Agreement is hereby amended to add a new Section 6.02(f) as follows: |
c. | Article XI of the Agreement is hereby amended so as to add the following defined term: |
a. | The Agreement is hereby amended to add a new Section 6.02(g) as follows: |
b. | Article XI of the Agreement is hereby amended so as to add the following defined term: |
Last Day of Employment: | Your last day of employment will be «Exit_Date», referred to as your “Last Day of Employment.” Unless otherwise noted below, your pay and benefits will cease as of your Last Day of Employment. |
Separation Payment: | As soon as administratively practical after your Last Day of Employment, P&G will provide you with a Separation Payment of «Total_Amount», less legally required withholdings and deductions. In no event will payment be made before expiration of the seven-day revocation period discussed below or later than the March 15th of the year following the year which includes your last day of employment. Amounts you owe to P&G as of your Last Day of Employment, including, but not limited to, wage and/or benefit overpayments and unpaid loans, will also be deducted from the Separation Payment. |
STAR Awards: | As of your Last Day of Employment, if you worked at least 28 days (4 calendar weeks) during that fiscal year, you will receive a pro-rated STAR award for that fiscal year. Your STAR award will be pro-rated by dividing the number of calendar days during the fiscal year from July 1 through your Last Day of Employment by 365. Your STAR award will be paid in cash in the September (but no later than September 15th) immediately following the end of the fiscal year in which you terminate. |
Equity Awards: | Your separation will be treated as a Special Separation for purposes of any outstanding equity awards granted under the Procter & Gamble 2009 Stock and Incentive Compensation Plan, the Procter & Gamble 2001 Stock and Incentive Compensation Plan, the Procter & Gamble 1992 Stock Plan, or the Gillette Company 2004 Long-Term Incentive Plan and as a result the awards will be retained subject to the original terms and conditions of the awards. Awards granted under the Procter & Gamble 2014 Stock & |
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Incentive Compensation Plan are retained subject to the terms and conditions of the Awards. This agreement does not alter the rights and obligations that you may have under the Procter & Gamble 2014 Stock & Incentive compensation Plan, the Procter & Gamble 2009 Stock and Incentive Compensation Plan, the Procter & Gamble 2001 Stock and Incentive Plan, the Procter & Gamble 1992 Stock Plan, and the Gillette Company 2004 Long-Term Incentive Plan. | |
Current Medical, Dental, and Life Insurance Benefits: | Your Medical (including prescription drug and EAP programs), Dental, and Basic Group Life insurance coverage will continue under the same terms until «Benefits_End_Date». When your extended coverage ends, you may be entitled to continue your Medical and Dental insurance coverage under COBRA. If you are entitled to COBRA continuation coverage, you will receive a notice of your right to elect COBRA. |
Retiree Medical and Dental Benefits: | If you were eligible for P&G retiree healthcare coverage on your Last Day of Employment, you will be eligible to enroll in P&G’s retiree medical and dental insurance coverage. You are eligible for P&G retiree healthcare coverage if you satisfy the regular retiree eligibility rules (i.e., you are a Regular Retiree) as of your Last Day of Employment. Under the terms of this Agreement, you also are eligible for P&G retiree healthcare coverage as a Special Retiree by satisfying the Rule of 70 as of your Last Day of Employment. You satisfy the Rule of 70 when your full years of age plus your full years of service equal 70.1 If you are eligible for P&G's retiree healthcare coverage as either a Regular Retiree or a Special Retiree as of your Last Day of Employment, you should contact the Employee Service Center before your extension of coverage ends to request retiree healthcare enrollment information. For details regarding the terms and conditions of your retiree health coverage, please refer to and review the summary plan descriptions, available at PGOne -> Life and Career. Important Note: If you become employed by a direct competitor of P&G (as determined by P&G’s Chief Human Resources Officer) in any capacity, you will not be eligible for coverage under P&G’s retiree healthcare coverage as long as you remain employed by such competitor. If you have questions, please contact the Benefits Service Center at 1-888-627-7472. |
1 Special rules apply to Gillette Heritage Employees with regard to retiree medical eligibility and the retiree medical cost sharing under the retiree medical plan. If you are a Gillette Heritage Employee, you will receive a separate handout on your retiree medical eligibility. |
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Retiree Life Benefits: | If you are eligible for retiree life coverage on your Last Day of Employment, your Basic Group Life Insurance will convert to Retiree Group Life Insurance. For details regarding the terms and conditions of your Retiree Group Life Insurance coverage, please refer to and review the summary plan descriptions available at PGOne -> Life and Career. |
Outplacement Services: | P&G’s outplacement supplier, Right Management Consultants, will provide services to assist you in managing your transition to a new future, based on your interest. Services include pre-decision counseling, career transition programs, and job development opportunities. Right Management Consultants will also assist you in preparing for your job search, including résumé preparation, cover letters, other written materials and interview and networking training. After you accept this Agreement, you may begin utilizing outplacement services on a limited basis prior to your Last Day of Employment, consistent with the needs of the business and your responsibilities to complete and/or transition your work. Note that you must begin utilizing outplacement services within 45 days of your Last Day of Employment to be eligible for this benefit. |
No Consideration Without Executing this Agreement: | You affirm that you understand and agree that you would not receive the separation payment and/or benefits specified in this Agreement without executing this Agreement and fulfilling the promises contained in it. Except as provided in this Agreement or under the terms and conditions of an applicable benefit plan or policy sponsored by P&G, you shall not be due any payments or benefits from P&G in connection with the termination of your employment. |
Continued Employment Through Your Last Day of Employment: | You agree to perform your work and responsibilities as an employee in a satisfactory manner up to and including your Last Day of Employment, including compliance with all provisions of this “Separation Agreement and Release.” If P&G determines that you have engaged in serious misconduct during your employment, you understand and agree that P&G may terminate your employment immediately and will not provide, nor will it be obligated to provide, you with the Separation Payment, medical benefits, outplacement and other benefits described above. If you have already received any such pay or benefits, you agree to repay them to P&G upon demand. |
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Nonadmission of Wrongdoing: | You affirm that you understand and agree that neither this Agreement nor the furnishing of the consideration for this Agreement, including the Separation Payment, shall be deemed or construed at any time for any purpose as an admission by P&G of wrongdoing or evidence of any liability or unlawful conduct of any kind. |
Release of Claims - Including Age Discrimination and Employment Claims: | In consideration of the Separation Payment and other benefits provided above to which you would not have been entitled under any existing P&G Policy, you release P&G from any and all claims you have against P&G. The term “P&G” includes «Company» and any of its present, former and future owners, parents, affiliates and subsidiaries, and its and their directors, officers, shareholders, employees, agents, servants, representatives, predecessors, successors and assigns and their employee benefit plans and programs and their administrators and fiduciaries. This release applies to claims about which you now know or may later discover, and includes but is not limited to: (1) claims arising under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq.; (2) claims arising out of or relating in any way to your employment with P&G or the conclusion of that employment; (3) claims arising under any federal, state and local employment discrimination laws, regulations or ordinances or other orders that relate to the employment relationship and/or employee benefits; and (4) any other federal, state or local law, rule, regulation or ordinance, public policy, contract, tort or common law. This release does not apply to claims that may arise after the date you accept this Agreement or that may not be released under applicable law. You are not waiving any rights you may have to: (a) your own vested accrued employee benefits under the P&G health, welfare, or retirement benefit plans as of the Last Day of Employment; (b) benefits and/or the right to seek benefits under applicable workers’ compensation and/or unemployment compensation statutes; (c) pursue claims which by law cannot be waived by signing this Agreement; (d) enforce this Agreement; and/or (e) challenge the validity of this Agreement. |
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You agree that the decision as to what would be your Last Day of Employment was made prior to your accepting and executing this Agreement, and you agree that you are releasing any claim in connection with the separation of your employment. Nothing in this Agreement prohibits or prevents you from filing a charge with or participating, testifying, or assisting in any investigation, hearing, or other proceeding before any federal, state, or local government agency. However, to the maximum extent permitted by law, you agree that if such an administrative claim is made, you shall not be entitled to recover any individual monetary relief or other individual remedies. If any claim is not subject to release, to the extent permitted by law, you agree that you waive any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which P&G is a party. | |
Confidential, Proprietary, Trade Secret Information & Period of Non-Competition: | You agree that you will not use or share any confidential, proprietary or trade secret information about any aspect of P&G’s business with any non-P&G employee or business entity at any time in the future. You further agree that you will not obtain or have in your possession any confidential, proprietary or trade secret information on or after your last day of employment. Confidential, proprietary or trade secret information includes, but is not limited to, marketing and advertising plans, pricing information, upstream plans, specific areas of research and development, project work, product formulation, processing methods, assignments of individual employees, testing and evaluation procedures, cost figures, construction plans, and special techniques or methods of any kind. Notwithstanding the requirements of confidentiality, U.S. law protects individuals from liability under federal or state trade secret laws for disclosure of trade secrets made by such individual i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney solely for the purpose of reporting or investigating a suspected violation of law; ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; or iii) to the individual’s attorney for use in a lawsuit alleging retaliation for reporting a suspected violation of law, provided that any document containing the trade secret is filed under seal and the individual does not otherwise disclose the trade secret, except pursuant to court order. |
«Employee_Name» «Actual_Offer_Date» Page 7 of 12 |
You further understand and agree that, unless you have prior written consent from P&G, you will not engage in any activity or provide any services for a period of three (3) years following your Last Day of Employment in connection with the manufacture, development, advertising, promotion or sale of any product which is the same as, similar to, or competitive with any products of P&G or its subsidiaries (including both existing products as well as products in development which are known to you, as a consequence of your employment with P&G): | |
1. With respect to which your work has been directly concerned at any time during the two (2) years preceding your Last Day of Employment; or | |
2. With respect to which during that period of time you, as a consequence of your job performance and duties, acquired knowledge of trade secrets or other confidential information of P&G. | |
For the purposes of this section, it shall be conclusively presumed that you have knowledge or information to which you were directly exposed through the actual receipt of memos or documents containing such information or through actual attendance at meetings at which such information was discussed or disclosed. The provisions of this section are not in lieu of, but are in addition to, your continuing obligation to not use or disclose P&G’s trade secrets and confidential information known to you until any particular trade secret or confidential information becomes generally known (through no fault of yours). Information regarding products in development, in test market or being marketed or promoted in a discrete geographic region, which information P&G is considering for a broader use, shall not be deemed generally known until such broader use is actually commercially implemented. Also, “generally known” means known throughout the domestic United States industry or, if you have job responsibilities outside of the United States, the appropriate foreign country or countries’ industry. If any restriction in this section is found by any court of competent jurisdiction or arbitrator to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it will be modified and interpreted to extend only over the maximum period of time, range of activities or geographic area so that it may be enforceable. As a participant in the 2009 Stock and Incentive Compensation Plan, the 2001 Stock and Incentive Compensation Plan, or the 1992 Stock Plan, you are also bound by the terms of Article F - Restrictions & Covenants of those plans, which are incorporated herein by reference. |
«Employee_Name» «Actual_Offer_Date» Page 8 of 12 |
If you are a participant in the 2014 Stock & Incentive Compensation Plan, you are also bound by the terms of Article 6 - Restrictions and Covenants of this plan which are incorporated herein by reference. | |
Non-Solicitation: | You acknowledge, as a participant in the Procter & Gamble 2014 Stock & Incentive Compensation Plan, the Procter & Gamble 2009 Stock and Incentive Compensation Plan, the Procter & Gamble 2001 Stock and Incentive Plan, the Procter & Gamble 1992 Stock Plan, and/or the Gillette Company 2004 Long-Term Incentive Plan that you are bound to comply with the Plans’ non-solicitation obligations. Specifically, you agree that you will not, at any time following your Employment Separation Date, attempt to directly or indirectly induce any employee of P&G or its affiliates or subsidiaries to be employed or perform services elsewhere or attempt directly or indirectly to solicit the trade or business of any current or prospective customer, supplier or partner of P&G or its affiliates or subsidiaries. |
Acknowledgements and Affirmations: | You affirm that you have not filed, caused to be filed, or presently are a party to any claim against P&G. You affirm that you have been paid and/or have received all compensation, wages, bonuses, commissions, and/or benefits which are due and payable as of the date you sign this Agreement. To the extent that you are required to report hours worked, you affirm that you have reported all hours worked as of the date you sign this Agreement. You affirm that you have been granted any leave to which you were entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws. You further affirm that you have no known workplace injuries or occupational diseases that have not been reported. |
Assignment of Intellectual Property: | You will promptly and fully disclose, transfer and assign to P&G all inventions and any other intellectual property (collectively “Intellectual Property”) made or conceived by you during your employment with P&G. You agree to fully cooperate in executing any papers required for establishing or protecting the Intellectual Property and for establishing P&G’s ownership, even if such cooperation is necessary after your Last Day of Employment. |
«Employee_Name» «Actual_Offer_Date» Page 9 of 12 |
Return of P&G Property: | You agree that on or before your Last Day of Employment, you will return to P&G in good condition all of its equipment, materials and information that were in your possession, custody or control (including, but not limited to, computers, files, documents, credit cards, keys and identification badges). You further agree that you will provide your manager with all passwords to P&G electronic communication and data systems before your Last Day of Employment. You further agree that on or before your Last Day of Employment, you will return or if directed to do so by your immediate manager, delete (i.e., destroy all copies of) any and all P&G confidential, proprietary or trade secret information you have maintained in your possession, custody, or control in paper, electronic and/or digital formats, including but not limited to, any such confidential, proprietary, or trade secret information (e.g., files, documents, etc.) that you may have electronically or digitally processed or stored on P&G-issued or on personally-owned or maintained digital devices and/or service accounts. Such digital devices and/or service accounts may include, but are not limited to desktop and laptop computers, notebooks, tablets, iPads, mobile phones, smartphones, personal digital assistants (PDAs), USB and flash drives, external hard drives, CDs, DVDs, and/or external file processing or storage provided by cloud service providers such as box.net, dropbox, Google docs, etc. |
Ethics Compliance: | You agree that you provided P&G all information known to you regarding any violations of the Procter & Gamble Worldwide Business Conduct Manual and/or any other violations of P&G policy or the law. |
Agreement to Arbitrate Disputes: | Resolving any future differences we may have in the courts can take a long time and be expensive. You and P&G therefore agree that the only remedy for all disputes that are not released by this Agreement or that arise out of your employment with or separation from P&G, or any aspect of this Agreement, will be to submit any such disputes (with the exception noted at the end of this section) to final and binding arbitration in accordance with the National Rules for Resolution of Employment Disputes of the American Arbitration Association then in effect. |
«Employee_Name» «Actual_Offer_Date» Page 10 of 12 |
You and P&G agree that the aggrieved party must send written notice of any claim to the other party by certified mail, return receipt requested. Written notice for P&G will be sent to: Secretary, One Procter & Gamble Plaza, Cincinnati, OH 45202, and to you at the most current address shown for you in P&G’s records. The arbitrator will apply Ohio law. At your written request, P&G will reimburse you for all fees and costs charged by the American Arbitration Association and its arbitrator to the extent they exceed the applicable fees and costs that would have been charged by a court of competent jurisdiction had your claim been filed in court. | |
There is one exception to this section. P&G may seek injunctive relief in any court of competent jurisdiction if it has reason to believe that you have violated or are about to violate (1) the terms of the “Confidential, Proprietary, Trade Secret Information & Period of Non-Competition” section above, or (2) if you are a participant in the 2009 Stock and Incentive Compensation Plan, the 2001 Stock and Incentive Compensation Plan, or the 1992 Stock Plan, the terms of Article F - Restrictions & Covenants of those plans or (3) if you are a participant in the 2014 Stock and Incentive Compensation Plan, the terms of Article 6 - Restrictions & Covenants of those plans. | |
Severability: | If any court of competent jurisdiction or arbitrator should later find that any portion of this Agreement is invalid, that invalidity will not affect the enforceability of any other portion of this Agreement. |
Employment References: | You understand that P&G’s historical policy is to not provide employment references to prospective employers. However, P&G is willing to waive that policy in your case on the following basis: You authorize your manager or human resources representative to provide an employment reference upon written or verbal request. In return, you release any claim against P&G and will not bring a lawsuit in court against P&G based upon that employment reference (or lack thereof). You agree that you will refer all reference inquiries to your manager or human resources representative only. You further understand that all disputes regarding employment references or the lack thereof must be resolved through the arbitration process described above. |
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No Reliance: | This Agreement sets forth the entire agreement between you and P&G and fully supersedes any prior agreements or understanding between the parties except that if you are a participant in the 2009 Stock and Incentive Compensation Plan, the 2001 Stock and Incentive Compensation Plan, or the 1992 Stock Plan, the terms of Article F - Restrictions & Covenants of those plans remain in full force and effect and are incorporated herein by reference and if you are a participant in the 2014 Stock Plan, the terms of Article 6 - Restrictions & Covenants of the plan remain in full force and are in effect and are incorporated herein by reference. In deciding to accept this Agreement, you agree that you have not relied upon any statements or promises by P&G, its managers, agents or employees, other than those set forth in this Agreement. No other promises or agreements concerning the matters described in this Agreement shall be binding unless in a subsequent document signed by these parties. |
Your Attorney: | You acknowledge that you have been and hereby are advised to consult with legal counsel before accepting this Agreement and have either done so or have voluntarily declined to do so. |
Timing for Acceptance or Revocation: | You have forty-five (45) calendar days in which to consider this Agreement in which you waive important rights, including those under the Age Discrimination in Employment Act of 1967. If you choose to sign this Agreement, please do so by indicating your acceptance of this Agreement with your electronic signature in P&G’s electronic system. We advise you to consult with an attorney of your choosing prior to signing this Agreement. Further, you may within seven (7) calendar days following the date you sign this Agreement, cancel and terminate it by giving written notice of your intention to revoke the Agreement to your immediate manager, and by returning to P&G any remuneration or benefits that have been advanced to you in anticipation of your not revoking your agreement and to which you are not entitled. If notice of your revocation is mailed, it must be postmarked within seven (7) calendar days after you sign this Agreement. You agree that any modifications, material or otherwise, made to this Agreement, do not restart or affect in any manner the original up to forty-five (45) calendar day consideration period. |
«Employee_Name» «Actual_Offer_Date» Page 12 of 12 |
The benefits described in this Agreement and pursuant to the summary plan description for the Procter & Gamble Basic Separation Program for U.S. Employees, are the special benefits you will receive by signing this Agreement. To the extent this Agreement describes benefits under other benefit plans and policies sponsored by P&G, these special benefits are also described in the summary plan descriptions for those plans. As such, nothing in this Agreement amends or changes the terms of any P&G-sponsored employee benefit plan or policy. |
After your Last Day of Employment, you will no longer be an active P&G employee, which may affect your coverage under those plans and policies. For example, plans may require that you enroll in Medicare to be eligible for coverage. For more information on how not being an active P&G employee may affect your coverage, please refer to and review the summary plan descriptions for each plan, available at PGOne -> Life and Career. |
<NAME> | <DATE> |
Subject: Award of Restricted Stock Units |
Number of Restricted Stock Units: | [# SHARES] | |
Grant Date: | [GRANT_DATE] | |
Vest Date: | [DATE (Day Before Next Annual Meeting Following Grant)] | |
Original Settlement Date: | One Year Following Termination of Directorship |
[FIRST NAME] [MIDDLE NAME] [LAST NAME] |
Subject: RESTRICTED STOCK UNIT SERIES RTN2 |
Grant Date: | [GRANT DATE] | |
Stock Price on Grant Date: | [GRANT PRICE] | |
Number of Restricted Stock Units: | [RSU SHARES 1] | |
Vest Date: | [VEST DATE 1] | |
Settlement Date: | [SETTLEMENT DATE 1] | |
Number of Restricted Stock Units: | [RSU SHARES 2] | |
Vest Date: | [VEST DATE 2] | |
Settlement Date: | [SETTLEMENT DATE 2] | |
Total Number of Restricted Stock Units: | [RSU SHARES] |
1. | Termination on Account of Death or Disability. In the case of death or disability, the Award will be fully vested and payment will be made by the later of the end of the calendar year or two and a half months following the date of death or disability. |
2. | Termination without Cause Pursuant to a Written Separation Agreement. In the event of your Termination of Employment from the Company or a Subsidiary without Cause, your Award is forfeited unless the Chief Human Resources Officer authorizes the retention of the Award and you have executed a written separation agreement with the Company that provides for retention of the Award. If the Award is retained pursuant to CHRO authorization, the Award will be delivered on the Settlement Date(s) as long as you remain in compliance with the terms of the Plan, the Regulations, and your separation agreement. |
Years Ended June 30 | Three Months Ended September 30 | ||||||||||||||||||||||||||
Amounts in millions, except ratio amounts | 2016 | 2015 | 2014 | 2013 | 2012 | 2016 | 2015 | ||||||||||||||||||||
EARNINGS, AS DEFINED | |||||||||||||||||||||||||||
Earnings from operations before income taxes after eliminating undistributed earnings of equity method investees | $ | 13,356 | $ | 11,009 | $ | 13,492 | $ | 13,499 | $ | 11,970 | $ | 3,715 | $ | 3,632 | |||||||||||||
Fixed charges (excluding capitalized interest) | 778 | 842 | 928 | 900 | 1,000 | 181 | 195 | ||||||||||||||||||||
TOTAL EARNINGS, AS DEFINED | $ | 14,134 | $ | 11,851 | $ | 14,420 | $ | 14,399 | $ | 12,970 | $ | 3,896 | $ | 3,827 | |||||||||||||
FIXED CHARGES, AS DEFINED | |||||||||||||||||||||||||||
Interest expense (including capitalized interest) | $ | 634 | $ | 693 | $ | 789 | $ | 755 | $ | 844 | $ | 145 | $ | 156 | |||||||||||||
1/3 of rental expense | 144 | 166 | 174 | 171 | 176 | 36 | 41 | ||||||||||||||||||||
TOTAL FIXED CHARGES, AS DEFINED | $ | 778 | $ | 859 | $ | 963 | $ | 926 | $ | 1,020 | $ | 181 | $ | 197 | |||||||||||||
RATIO OF EARNINGS TO FIXED CHARGES | 18.2x | 13.8x | 15.0x | 15.5x | 12.7x | 21.5x | 19.4x |
(1) | I have reviewed this quarterly report on Form 10-Q of The Procter & Gamble Company; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(5) | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ DAVID S. TAYLOR |
(David S. Taylor) |
President and Chief Executive Officer |
October 25, 2016 |
Date |
(1) | I have reviewed this quarterly report on Form 10-Q of The Procter & Gamble Company; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(5) | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ JON R. MOELLER |
(Jon R. Moeller) |
Chief Financial Officer |
October 25, 2016 |
Date |
(1) | The Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2016 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in that Form 10-Q fairly presents, in all material respects, the financial conditions and results of operations of the Company. |
/s/ DAVID S. TAYLOR |
(David S. Taylor) |
President and Chief Executive Officer |
October 25, 2016 |
Date |
(1) | The Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2016 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in that Form 10-Q fairly presents, in all material respects, the financial conditions and results of operations of the Company. |
/s/ JON R. MOELLER |
(Jon R. Moeller) |
Chief Financial Officer |
October 25, 2016 |
Date |
DOCUMENT AND ENTITY INFORMATION |
3 Months Ended |
---|---|
Sep. 30, 2016
shares
| |
Document Information [Line Items] | |
Entity Registrant Name | PROCTER & GAMBLE CO |
Entity Central Index Key | 0000080424 |
Current Fiscal Year End Date | --06-30 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2016 |
Document Fiscal Year Focus | 2017 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Trading Symbol | PG |
Entity Well Known Seasoned Issuer | Yes |
Entity Current Reporting Status | Yes |
Entity Voluntary Files | No |
Entity Common Stock, Shares Outstanding | 2,675,992,524 |
CONDOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Net Earnings | $ 2,757 | $ 2,635 |
Financial Statement Translation | (1) | (1,023) |
Unrealized Gains/(Losses) on Hedges | (115) | (42) |
Unrealized Gains/(Losses) on Investment Securities | (13) | 8 |
Unrealized Gains/(Losses) on Defined Benefit Retirement Plans | 93 | 91 |
Total Other Comprehensive Income (Loss), Net of Tax | (36) | (966) |
Total Comprehensive Income/(Loss) | 2,721 | 1,669 |
Less: Total Comprehensive Income Attributable to Noncontrolling Interest | 43 | 34 |
Total Comprehensive Income/(Loss) Attributable to Procter & Gamble | $ 2,678 | $ 1,635 |
CONSOLIDATED BALANCE SHEETS - USD ($) shares in Millions, $ in Millions |
Sep. 30, 2016 |
Jun. 30, 2016 |
---|---|---|
Current Assets | ||
Cash and Cash Equivalents | $ 7,456 | $ 7,102 |
Restricted Cash | 1,870 | 0 |
Available-for-Sale Investment Securities | 6,615 | 6,246 |
Accounts Receivable | 4,713 | 4,373 |
Inventories | ||
Materials and Supplies | 1,380 | 1,188 |
Work in Process | 549 | 563 |
Finished Goods | 3,070 | 2,965 |
Total Inventories | 4,999 | 4,716 |
Deferred Income Taxes | 0 | 1,507 |
Prepaid Expenses and Other Current Assets | 2,447 | 2,653 |
Current Assets Held for Sale | 7,071 | 7,185 |
Total Current Assets | 35,171 | 33,782 |
Property, Plant and Equipment, Net | 19,310 | 19,385 |
Goodwill | 44,458 | 44,350 |
Trademarks and Other Intangible Assets, Net | 24,429 | 24,527 |
Other Noncurrent Assets | 5,675 | 5,092 |
Total Assets | 129,043 | 127,136 |
Current Liabilities | ||
Accounts Payable | 9,024 | 9,325 |
Accrued and Other Liabilities | 8,032 | 7,449 |
Current Liabilities Held for Sale | 3,130 | 2,343 |
Debt Due Within One Year | 12,215 | 11,653 |
Total Current Liabilities | 32,401 | 30,770 |
Long-Term Debt | 18,910 | 18,945 |
Deferred Income Taxes | 8,515 | 9,113 |
Other Noncurrent Liabilities | 10,266 | 10,325 |
Total Liabilities | 70,092 | 69,153 |
Shareholders' Equity | ||
Preferred Stock | $ 1,029 | $ 1,038 |
Common Stock, Shares, Issued | 4,009.2 | 4,009.2 |
Common Stock, Value, Issued | $ 4,009 | $ 4,009 |
Additional Paid in Capital | 63,553 | 63,714 |
Reserve For ESOP Debt Retirement | (1,271) | (1,290) |
Accumulated Other Comprehensive Income/(Loss) | (15,943) | (15,907) |
Treasury Stock | (81,970) | (82,176) |
Retained Earnings | 88,855 | 87,953 |
Noncontrolling Interest | 689 | 642 |
Total Shareholders' Equity | 58,951 | 57,983 |
Total Liabilities and Shareholders' Equity | $ 129,043 | $ 127,136 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Cash Flows [Abstract] | ||
Cash and Cash Equivalents, Beginning of Period | $ 7,102 | $ 6,836 |
Operating Activities | ||
Net Earnings | 2,757 | 2,635 |
Depreciation and Amortization | 728 | 731 |
Share-based Compensation Expense | 44 | 67 |
Deferred Income Taxes | (177) | 89 |
Gain on Sale of Businesses | (75) | (7) |
Goodwill and Intangible Asset Impairment Charges | 0 | 402 |
Changes In: | ||
Accounts Receivable | (424) | (368) |
Inventories | (287) | (519) |
Accounts Payable, Accrued and Other Liabilities | 298 | 298 |
Other Operating Assets and Liabilities | 135 | 141 |
Other Noncash Expense | 26 | 69 |
Total Operating Activities | 3,025 | 3,538 |
Investing Activities | ||
Capital Expenditures | (684) | (532) |
Proceeds from Asset Sales | 183 | 38 |
Acquisitions, Net of Cash Acquired | (14) | 0 |
Purchases of Short-term Investments | (631) | (494) |
Proceeds from Sales of Short-term Investments | 243 | 418 |
Cash Transferred to Discontinued Beauty Business | (348) | 0 |
Restricted Cash Related to Beauty Brands Divestiture | (874) | 0 |
Change in Other Investments | 4 | 24 |
Total Investing Activites | (2,121) | (546) |
Financing Activities | ||
Dividends to Shareholders | (1,851) | (1,865) |
Change in Short-term Debt | 1,519 | 450 |
Additions to Long-term Debt | 891 | 0 |
Reductions of Long-term Debt | (1,001) | (537) |
Treasury Stock Purchases | (1,002) | (502) |
Impact of Stock Options and Other | 937 | 483 |
Total Financing Activities | (507) | (1,971) |
Effect of Exchange Rate on Cash and Cash Equivalents | (43) | (152) |
Change in Cash and Cash Equivalents | 354 | 869 |
Cash and Cash Equivalents, End of Period | $ 7,456 | $ 7,705 |
BASIS OF PRESENTATION |
3 Months Ended |
---|---|
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Basis of Presentation These statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016. In the opinion of management, the accompanying unaudited Consolidated Financial Statements of The Procter & Gamble Company and subsidiaries (the "Company," "Procter & Gamble," "P&G," "we" or "our") contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported. However, the results of operations included in such financial statements may not necessarily be indicative of annual results. |
NEW ACCOUNTING PRONOUNCEMENTS AND POLICIES |
3 Months Ended |
---|---|
Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Changes and Error Corrections [Text Block] | New Accounting Pronouncements and Policies In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)". This guidance outlines a single, comprehensive model for accounting for revenue from contracts with customers. We will adopt the standard no later than July 1, 2018. While we are currently assessing the impact of the new standard, we do not expect this new guidance to have a material impact on our Consolidated Financial Statements. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. This guidance simplifies the presentation of deferred taxes on the balance sheet by requiring that all deferred tax assets and liabilities be classified as non-current. The new standard is effective for us beginning July 1, 2017, with early adoption permitted. We elected to early adopt the new guidance on a prospective basis in the first quarter of fiscal year 2017. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. The standard requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. We will adopt the standard no later than July 1, 2019. We are currently assessing the impact that the new standard will have on our Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-09, "Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" which changes the accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits (which represent the excess of actual tax benefits received at vest or settlement over the benefits recognized at issuance of share based payments) and tax deficiencies (which represent the amount by which actual tax benefits received at vest or settlement is lower than the benefits recognized at issuance of share based payments) to be recorded in the income statement when the awards vest or are settled. The amended guidance also requires excess tax benefits to be classified as an operating activity in the statement of cash flows, rather than a financing activity. The standard further provides an accounting policy election to account for forfeitures as they occur rather than utilizing the estimated amount of forfeitures at the time of issuance. The new standard is effective for us beginning July 1, 2017, with early adoption permitted. We elected to early adopt the new guidance on a prospective basis in the first quarter of fiscal year 2017. The primary impact of adoption was the recognition of excess tax benefits in our Income taxes on continuing operations rather than in Additional paid-in capital for fiscal year 2017. As a result, we recognized a discrete tax benefit of $117 in Income taxes on continuing operations during the three months ended September 30, 2016. We also elected to adopt the cash flow presentation of the excess tax benefits prospectively commencing in the first quarter of fiscal 2017. We have elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. None of the other provisions in this amended guidance had a significant impact on our Consolidated Financial Statements. No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on our Consolidated Financial Statements. |
SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | Segment Information As discussed in Note 11, the Beauty Brands and Batteries businesses are presented as discontinued operations and are excluded from segment results for all periods presented. Effective July 1, 2016, the Company began accounting for sales to its Venezuela subsidiaries in Corporate for management reporting purposes. As a result, we are also reflecting such sales in Corporate for segment reporting purposes. This change is being made on a prospective basis for both management and external segment reporting purposes and did not have a significant impact on any of the segments. Following is a summary of reportable segment results:
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill and Other Intangible Assets Goodwill is allocated by reportable segment as follows:
On October 1, 2016, the Company completed the divestiture of four product categories, comprised of 41 of its beauty brands ("Beauty Brands"), to Coty, Inc. The transaction includes the global salon professional hair care and color, retail hair color and cosmetics businesses and a majority of the fine fragrances business, along with select hair styling brands (see Note 11). The Beauty Brands have historically been part of the Company's Beauty reportable segment. In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of the Beauty Brands are presented as discontinued operations. As a result, the goodwill attributable to the Beauty Brands as of June 30, 2016 and September 30, 2016 is excluded from the preceding table and is reported as Current assets held for sale in the Consolidated Balance Sheets. Goodwill increased from June 30, 2016 primarily due to currency translation. The test to evaluate goodwill for impairment is a two-step process. In the first step, we compare the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit is less than its carrying value, we perform a second step to determine the implied fair value of the reporting unit's goodwill. The second step of the impairment analysis requires a valuation of a reporting unit's tangible and intangible assets and liabilities in a manner similar to the allocation of purchase price in a business combination. If the resulting implied fair value of the reporting unit's goodwill is less than its carrying value, that difference represents an impairment. The business unit valuations used to test goodwill and intangible assets for impairment are dependent on a number of significant estimates and assumptions including macroeconomic conditions, overall category growth rates, competitive activities, cost containment and margin expansion and Company business plans. We believe these estimates and assumptions are reasonable. However, future changes in the judgments, assumptions and estimates that are used in our impairment testing for goodwill and indefinite-lived intangible assets, including discount and tax rates or future cash flow projections, could result in significantly different estimates of the fair values. Most of our goodwill reporting units are comprised of a combination of legacy and acquired businesses and as a result have fair value cushions that, at a minimum, exceed two times their underlying carrying values. Certain of our continuing goodwill reporting units, in particular Shave Care and Appliances, are comprised entirely of acquired businesses and as a result have fair value cushions that are not as high. While both of these wholly-acquired reporting units have fair value cushions that currently exceed the underlying carrying values, the Shave Care cushion, as well as the related indefinite-lived intangible assets, have been reduced to below 20% due in large part to significant currency devaluations in a number of countries relative to the U.S. dollar in recent years. As a result, this unit is more susceptible to impairment risk from adverse changes in business operating plans and macroeconomic environment conditions, including any further significant devaluation of major currencies relative to the U.S. dollar. Any such adverse changes in the future could reduce the underlying cash flows used to estimate fair values and could result in a decline in fair value that could trigger future impairment charges of the business unit's goodwill and indefinite-lived intangibles. Identifiable intangible assets at September 30, 2016 are comprised of:
Due to the divestiture of the Beauty Brands, intangible assets specific to these businesses are reported as Current assets held for sale (see Note 11). Intangible assets with determinable lives consist of brands, patents, technology and customer relationships. The intangible assets with indefinite lives consist of brands. The amortization expense of intangible assets for the three months ended September 30, 2016 and 2015 was $89 and $104, respectively. |
EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] | Earnings Per Share Net earnings attributable to Procter & Gamble less preferred dividends (net of related tax benefits) are divided by the weighted average number of common shares outstanding during the period to calculate Basic net earnings per common share. Diluted net earnings per common share are calculated to give effect to stock options and other stock-based awards and assume conversion of preferred stock. Net earnings attributable to Procter & Gamble and common shares used to calculate Basic and Diluted net earnings per share were as follows:
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SHARE-BASED COMPENSATION AND POSTRETIREMENT BENEFITS |
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Compensation and Employee Benefit Plans [Text Block] | Share-Based Compensation and Postretirement Benefits The following table provides a summary of our share-based compensation expense and postretirement benefit costs:
The disclosures above for both share-based compensation and postretirement benefits include amounts related to discontinued operations which were not material in any period presented. |
RISK MANAGEMENT ACTIVITIES AND FAIR VALUE MEASUREMENTS |
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Risk Management Activities and Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Management And Fair Value [Text Block] | Risk Management Activities and Fair Value Measurements As a multinational company with diverse product offerings, we are exposed to market risks, such as changes in interest rates, currency exchange rates and commodity prices. There have been no significant changes in our risk management policies or activities during the three months ended September 30, 2016. The Company has not changed its valuation techniques used in measuring the fair value of any financial assets and liabilities during the period. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers between levels during the periods presented. Also, there was no significant activity within the Level 3 assets and liabilities during the periods presented. There were no significant assets or liabilities that were remeasured at fair value on a non-recurring basis for the three months ended September 30, 2016. The following table sets forth the Company’s financial assets as of September 30, 2016 and June 30, 2016 that are measured at fair value on a recurring basis during the period:
Investment securities are presented in Available-for-sale investment securities and Other noncurrent assets. The amortized cost of U.S. government securities with maturities less than one year was $643 as of September 30, 2016 and $292 as of June 30, 2016. The amortized cost of U.S. government securities with maturities between one and five years was $4,162 as of September 30, 2016 and $4,513 as of June 30, 2016. The amortized cost of Corporate bond securities with maturities of less than a year was $387 as of September 30, 2016 and $382 as of June 30, 2016. The amortized cost of Corporate bond securities with maturities between one and five years was $1,399 as of September 30, 2016 and $1,018 as of June 30, 2016. The Company's investments measured at fair value are generally classified as Level 2 within the fair value hierarchy. There are no material investment balances classified as either Level 1 or Level 3 within the fair value hierarchy. Fair values are generally estimated based upon quoted market prices for similar instruments. The fair value of long-term debt was $23,435 and $24,362 as of September 30, 2016 and June 30, 2016, respectively. This includes the current portion ($1,723 and $2,761 as of September 30, 2016 and June 30, 2016, respectively) of debt instruments. Certain long-term debt is recorded at fair value. Certain long-term debt is not recorded at fair value on a recurring basis but is measured at fair value for disclosure purposes. Long-term debt with fair value of $2,281 and $2,331 as of September 30, 2016 and June 30, 2016, respectively, is classified as Level 2 within the fair value hierarchy. All remaining long-term debt is classified as Level 1 within the fair value hierarchy. Fair values are generally estimated based on quoted market prices for identical or similar instruments. The following table sets forth the notional amounts and fair values of qualifying and non-qualifying financial instruments used in hedging transactions as of September 30, 2016 and June 30, 2016:
All derivative assets are presented in Prepaid expenses and other current assets or Other noncurrent assets. All derivative liabilities are presented in Accrued and other liabilities or Other noncurrent liabilities. The total notional amount of contracts outstanding at the end of the period is indicative of the Company's derivative activity during the period. The change in the notional balance of foreign currency contracts not designated as hedging instruments during the period reflects changes in the level of intercompany financing activity. All of the Company's derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy.
During the next 12 months, the amount of the September 30, 2016 Accumulated other comprehensive income (AOCI) balance that will be reclassified to earnings is expected to be immaterial. The amounts of gains and losses on qualifying and non-qualifying financial instruments used in hedging transactions for the three months ended September 30, 2016 and 2015 are as follows:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
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Statement of Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) Note [Text Block] | Accumulated Other Comprehensive Income/(Loss) The table below presents the changes in Accumulated other comprehensive income/(loss) by component and the reclassifications out of Accumulated other comprehensive income/(loss):
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RESTRUCTURING PROGRAM |
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Restructuring and Related Activities Disclosure [Text Block] | Restructuring Program The Company has historically incurred an ongoing annual level of restructuring-type activities to maintain a competitive cost structure, including manufacturing and workforce optimization. Before-tax costs incurred under the ongoing program have generally ranged from $250 to $500 annually. In fiscal 2012, the Company initiated an incremental restructuring program as part of a productivity and cost savings plan to reduce costs in the areas of supply chain, research and development, marketing and overheads. The productivity and cost savings plan was designed to accelerate cost reductions by streamlining management decision making, manufacturing and other work processes in order to help fund the Company's growth strategy. The Company expects to incur approximately $5.5 billion in before-tax restructuring costs over a six year period (from fiscal 2012 through fiscal 2017), including costs incurred as part of the ongoing and incremental restructuring program. The program includes a non-manufacturing overhead enrollment reduction target of approximately 25% - 30% by the end of fiscal 2017. Through September 30, 2016, the Company reduced non-manufacturing enrollment by approximately 24%. The reductions are enabled by the elimination of duplicate work, simplification through the use of technology and optimization of various functional and business organizations and the Company's global footprint. In addition, the plan includes integration of newly acquired companies and the optimization of the supply chain and other manufacturing processes. Restructuring costs incurred consist primarily of costs to separate employees, asset-related costs to exit facilities and other costs. Through fiscal 2016, the Company incurred charges of approximately $4.9 billion. Approximately $2.3 billion of these charges were related to separations, $1.4 billion were asset-related costs and $1.2 billion were related to other restructuring-type costs. For the three month period ended September 30, 2016, the Company incurred total restructuring charges of approximately $168. Approximately $21 of these charges were recorded in SG&A and approximately $129 of these charges were recorded in Cost of products sold. The remainder of the charges were included in discontinued operations. The following table presents restructuring activity for the three months ended September 30, 2016:
Separation Costs Employee separation charges for the three month period ended September 30, 2016 relate to severance packages for approximately 520 employees, including non-manufacturing employees of approximately 80. The packages are predominantly voluntary and the amounts are calculated based on salary levels and past service periods. Severance costs related to voluntary separations are generally charged to earnings when the employee accepts the offer. Since its inception, the restructuring program has incurred separation charges related to approximately 17,590 employees, of which approximately 9,620 are non-manufacturing overhead personnel. Asset-Related Costs Asset-related costs consist of both asset write-downs and accelerated depreciation. Asset write-downs relate to the establishment of a new fair value basis for assets held-for-sale or disposal. These assets were written down to the lower of their current carrying basis or amounts expected to be realized upon disposal, less minor disposal costs. Charges for accelerated depreciation relate to long-lived assets that will be taken out of service prior to the end of their normal service period. These assets relate primarily to manufacturing consolidations and technology standardizations. The asset-related charges will not have a significant impact on future depreciation charges. Other Costs Other restructuring-type charges are incurred as a direct result of the restructuring program. Such charges primarily include employee relocation related to separations and office consolidations, termination of contracts related to supply chain redesign and the cost to change internal systems and processes to support the underlying organizational changes. Consistent with our historical policies for ongoing restructuring-type activities, the restructuring program charges are funded by and included within Corporate for both management and segment reporting. Accordingly, all of the charges under the program are included within the Corporate reportable segment. However, for informative purposes, the following table summarizes the total restructuring costs related to our reportable segments:
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies Litigation The Company is subject to various legal proceedings and claims arising out of our business which cover a wide range of matters such as antitrust, trade and other governmental regulations, product liability, patent and trademark, advertising, contracts, environmental, labor and employment and tax. With respect to these and other litigation and claims, while considerable uncertainty exists, in the opinion of management and our counsel, the ultimate resolution of the various lawsuits and claims will not materially affect our financial position, results of operations or cash flows. We are also subject to contingencies pursuant to environmental laws and regulations that in the future may require us to take action to correct the effects on the environment of prior manufacturing and waste disposal practices. Based on currently available information, we do not believe the ultimate resolution of environmental remediation will materially affect our financial position, results of operations or cash flows. Income Tax Uncertainties The Company is present in approximately 140 taxable jurisdictions and, at any point in time, has 50 – 60 jurisdictional audits underway at various stages of completion. We evaluate our tax positions and establish liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite our belief that the underlying tax positions are fully supportable. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law and closing of statutes of limitations. Such adjustments are reflected in the tax provision as appropriate. We have tax years open ranging from 2008 and forward. We are generally not able to reliably estimate the ultimate settlement amounts until the close of the audit. Based on information currently available, we anticipate that over the next 12 month period, audit activity could be completed related to uncertain tax positions in multiple jurisdictions for which we have accrued liabilities of approximately $200, including interest and penalties. Additional information on the Commitments and Contingencies of the Company can be found in our Annual Report on Form 10-K for the year ended June 30, 2016. |
DISCONTINUED OPERATIONS |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued Operations On October 1, 2016, the Company completed the divestiture of four product categories to Coty, Inc. (“Coty”). The divestiture included 41 of the Company's beauty brands (“Beauty Brands”), including the global salon professional hair care and color, retail hair color, cosmetics and fine fragrance businesses, along with select hair styling brands. The value of the transaction is estimated at approximately $11.4 billion. The value is comprised of 105 million shares of common stock of the Company, which were tendered by shareholders of the Company and exchanged for shares of the newly formed entity holding the Beauty Brands immediately prior to the close of the transaction, valued at approximately $9.4 billion, and the assumption of $1.9 billion of debt by the entity holding the Beauty Brands. Subsequent to the initial contract signing and prior to the completion of the merger, two of the fine fragrance brands, Dolce & Gabbana and Christina Aguilera, were excluded from the divestiture. These brands have been subsequently divested at amounts that approximated their adjusted carrying values. In February 2016, the Company completed the divestiture of its Batteries business to Berkshire Hathaway (BH) via a split transaction, in which the Company exchanged Duracell, which the Company had infused with approximately $1.9 billion of additional cash, to repurchase all 52.5 million shares of P&G stock owned by BH. During fiscal 2016, the Company recorded a non-cash, before-tax goodwill and indefinite-lived asset impairment charge of $402 ($350 after-tax), to reduce the value to the total estimated proceeds based on the value of BH’s shares in P&G stock at the time of the impairment charges. The Company recorded an after-tax gain on the final transaction of $422 to reflect the final value of the BH’s shares in P&G stock. The total value of the transaction was $4.2 billion representing the value of the Duracell business and the cash infusion. The cash infusion was reflected as a purchase of treasury stock. In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of the Beauty Brands and Batteries business are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. Additionally, the Beauty Brands' balance sheet positions are presented as assets and liabilities held for sale in the Consolidated Balance Sheets. The Beauty Brands were historically part of the Company's Beauty reportable segment. The Batteries business was historically part of the Company's Fabric & Home Care reportable segment. On July 1, 2015, the Company adopted ASU 2014-08, which included new reporting and disclosure requirements for discontinued operations. The new requirements are effective for discontinued operations occurring on or after the adoption date, which includes the Beauty Brands divestiture. All other discontinued operations prior to July 1, 2015 are reported based on the previous disclosure requirements for discontinued operations, including the Batteries divestiture. The following table summarizes Net earnings/(loss) from discontinued operations and reconciles to the Consolidated Statements of Earnings:
The following is selected financial information included in Net earnings/(loss) from discontinued operations for the Beauty Brands:
The Beauty Brands incurred transition costs of $135 for the three months ended September 30, 2016, included in the above table. The following is selected financial information related to cash flows from discontinued operations for the Beauty Brands:
The major components of assets and liabilities of the Beauty Brands held for sale are provided below.
Prior to the transaction, Beauty Brands drew $1.9 billion of debt ($1.0 billion as of June 30, 2016), which as noted above, was used to fund a portion of the transaction. The proceeds were held by the Beauty Brands as of June 30, 2016. As of September 30, 2016 the funds are held by the Company and are reflected on the Consolidated Balance Sheet as Restricted cash until the anticipated legal closing activities are completed. Subsequent to closing, this cash will be used to retire P&G debt as part of a broader debt retirement program that was announced subsequent to September 30, 2016. The following is selected financial information included in Net earnings/(loss) from discontinued operations for the Batteries business:
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SEGMENT INFORMATION (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Following is a summary of reportable segment results:
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | Goodwill is allocated by reportable segment as follows:
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Schedule of Intangible Assets and Goodwill [Table Text Block] | Identifiable intangible assets at September 30, 2016 are comprised of:
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EARNINGS PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Net earnings attributable to Procter & Gamble and common shares used to calculate Basic and Diluted net earnings per share were as follows:
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SHARE-BASED COMPENSATION AND POSTRETIREMENT BENEFITS (Tables) |
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Compensation and Employee Benefit Plans [Table Text Block] | The following table provides a summary of our share-based compensation expense and postretirement benefit costs:
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RISK MANAGEMENT ACTIVITIES AND FAIR VALUE MEASUREMENTS (Tables) |
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following table sets forth the Company’s financial assets as of September 30, 2016 and June 30, 2016 that are measured at fair value on a recurring basis during the period:
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Schedule of Derivative Instruments [Table Text Block] | The following table sets forth the notional amounts and fair values of qualifying and non-qualifying financial instruments used in hedging transactions as of September 30, 2016 and June 30, 2016:
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Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block] |
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Derivative Instruments, Gain (Loss) [Table Text Block] | The amounts of gains and losses on qualifying and non-qualifying financial instruments used in hedging transactions for the three months ended September 30, 2016 and 2015 are as follows:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
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Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The table below presents the changes in Accumulated other comprehensive income/(loss) by component and the reclassifications out of Accumulated other comprehensive income/(loss):
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RESTRUCTURING PROGRAM (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | The following table presents restructuring activity for the three months ended September 30, 2016:
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Restructuring and Related Costs [Table Text Block] | However, for informative purposes, the following table summarizes the total restructuring costs related to our reportable segments:
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DISCONTINUED OPERATIONS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table summarizes Net earnings/(loss) from discontinued operations and reconciles to the Consolidated Statements of Earnings:
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Discontinued Operations and Disposal Groups - Beauty Brands [Table Text Block] | The following is selected financial information included in Net earnings/(loss) from discontinued operations for the Beauty Brands:
The following is selected financial information related to cash flows from discontinued operations for the Beauty Brands:
The major components of assets and liabilities of the Beauty Brands held for sale are provided below.
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Disposal Groups, Including Discontinued Operations - Batteries [Table Text Block] | The following is selected financial information included in Net earnings/(loss) from discontinued operations for the Batteries business:
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NEW ACCOUNTING PRONOUNCEMENTS AND POLICIES - ADDITIONAL INFORMATION (Details) $ in Millions |
3 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Accounting Changes and Error Corrections [Abstract] | |
Income Tax Benefit (Expense), behind New Accounting Pronouncement | $ 117 |
SEGMENT INFORMATION (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
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Segment Reporting Information [Line Items] | ||
Net Sales | $ 16,518 | $ 16,527 |
Earnings/(Loss) from Continuing Operations Before Income Taxes | 3,738 | 3,654 |
Net Earnings/(Loss) from Continuing Operations | 2,875 | 2,777 |
Beauty | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 2,996 | 3,041 |
Earnings/(Loss) from Continuing Operations Before Income Taxes | 783 | 822 |
Net Earnings/(Loss) from Continuing Operations | 592 | 624 |
Grooming | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 1,658 | 1,674 |
Earnings/(Loss) from Continuing Operations Before Income Taxes | 529 | 499 |
Net Earnings/(Loss) from Continuing Operations | 415 | 390 |
Health Care | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 1,861 | 1,796 |
Earnings/(Loss) from Continuing Operations Before Income Taxes | 496 | 448 |
Net Earnings/(Loss) from Continuing Operations | 320 | 318 |
Fabric & Home Care | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 5,302 | 5,251 |
Earnings/(Loss) from Continuing Operations Before Income Taxes | 1,129 | 1,120 |
Net Earnings/(Loss) from Continuing Operations | 728 | 747 |
Baby, Feminine & Family Care | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 4,595 | 4,658 |
Earnings/(Loss) from Continuing Operations Before Income Taxes | 1,045 | 1,111 |
Net Earnings/(Loss) from Continuing Operations | 697 | 749 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 106 | 107 |
Earnings/(Loss) from Continuing Operations Before Income Taxes | (244) | (346) |
Net Earnings/(Loss) from Continuing Operations | $ 123 | $ (51) |
GOODWILL AND OTHER INTANGIBLE ASSETS - ADDITIONAL INFORMATION (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2016
USD ($)
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Sep. 30, 2015
USD ($)
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Jul. 09, 2015 |
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Other Significant Noncash Transactions [Line Items] | |||
Amortization of Intangible Assets | $ 89 | $ 104 | |
Shave Care | |||
Other Significant Noncash Transactions [Line Items] | |||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 20.00% | ||
Beauty Brands | |||
Other Significant Noncash Transactions [Line Items] | |||
Disposal Groups - Number of Product Categories | 4 | ||
Disposal Groups - Number of Brands | 41 |
GOODWILL AND OTHER INTANGIBLE ASSETS - CHANGE IN THE NET CARRYING AMOUNT OF GOODWILL BY GLOBAL BUSINESS UNIT (Details) $ in Millions |
3 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill at June 30, 2016 | $ 44,350 |
Goodwill, Acquisitions and Divestitures | (13) |
Goodwill, Translation and Other | 121 |
Goodwill at September 30, 2016 | 44,458 |
Beauty | |
Goodwill [Roll Forward] | |
Goodwill at June 30, 2016 | 12,645 |
Goodwill, Acquisitions and Divestitures | 0 |
Goodwill, Translation and Other | 52 |
Goodwill at September 30, 2016 | 12,697 |
Grooming | |
Goodwill [Roll Forward] | |
Goodwill at June 30, 2016 | 19,477 |
Goodwill, Acquisitions and Divestitures | 0 |
Goodwill, Translation and Other | 39 |
Goodwill at September 30, 2016 | 19,516 |
Health Care | |
Goodwill [Roll Forward] | |
Goodwill at June 30, 2016 | 5,840 |
Goodwill, Acquisitions and Divestitures | (10) |
Goodwill, Translation and Other | 14 |
Goodwill at September 30, 2016 | 5,844 |
Fabric & Home Care | |
Goodwill [Roll Forward] | |
Goodwill at June 30, 2016 | 1,856 |
Goodwill, Acquisitions and Divestitures | (3) |
Goodwill, Translation and Other | 2 |
Goodwill at September 30, 2016 | 1,855 |
Baby, Feminine & Family Care | |
Goodwill [Roll Forward] | |
Goodwill at June 30, 2016 | 4,532 |
Goodwill, Acquisitions and Divestitures | 0 |
Goodwill, Translation and Other | 14 |
Goodwill at September 30, 2016 | $ 4,546 |
GOODWILL AND OTHER INTANGIBLE ASSETS - IDENTIFIABLE INTANGIBLE ASSETS (Details) $ in Millions |
Sep. 30, 2016
USD ($)
|
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Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 29,319 |
Accumulated Amortization | (4,890) |
Intangible Assets with Indefinite Lives | |
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | 21,682 |
Accumulated Amortization | 0 |
Intangible Assets with Determinable Lives | |
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | 7,637 |
Accumulated Amortization | $ (4,890) |
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
||||||||||
Earnings Per Share Reconciliation [Abstract] | |||||||||||
Net Earnings/(Loss) | $ 2,757 | $ 2,635 | |||||||||
Net Earnings Attributable to Noncontrolling Interest | (43) | (34) | |||||||||
Net Earnings/(Loss) Attributable to P&G (Diluted) | 2,714 | 2,601 | |||||||||
Preferred Dividends, Net of Tax Benefit | (63) | (65) | |||||||||
Net Earnings/(Loss) Attributable to P&G Available to Common Shareholders (Basic) | $ 2,651 | $ 2,536 | |||||||||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||||||||
Basic Weighted Average Common Shares Outstanding | 2,674.7 | 2,720.1 | |||||||||
Effect of Dilutive Securities | |||||||||||
Conversion of Preferred Shares | [1] | 101.0 | 105.7 | ||||||||
Exercise of Stock Options and Other Unvested Equity Awards | [2] | 47.2 | 41.7 | ||||||||
Diluted Weighted Average Common Shares Outstanding | 2,822.9 | 2,867.5 | |||||||||
Basic Net Earnings/(Loss) Per Common Share | [3],[4] | $ 0.99 | $ 0.93 | ||||||||
Diluted Net Earnings/(Loss) Per Common Share | [3],[4] | $ 0.96 | $ 0.91 | ||||||||
Continuing Operations | |||||||||||
Earnings Per Share Reconciliation [Abstract] | |||||||||||
Net Earnings/(Loss) | $ 2,875 | $ 2,777 | |||||||||
Net Earnings Attributable to Noncontrolling Interest | (43) | (34) | |||||||||
Net Earnings/(Loss) Attributable to P&G (Diluted) | 2,832 | 2,743 | |||||||||
Preferred Dividends, Net of Tax Benefit | (63) | (65) | |||||||||
Net Earnings/(Loss) Attributable to P&G Available to Common Shareholders (Basic) | $ 2,769 | $ 2,678 | |||||||||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||||||||
Basic Weighted Average Common Shares Outstanding | 2,674.7 | 2,720.1 | |||||||||
Effect of Dilutive Securities | |||||||||||
Conversion of Preferred Shares | [1] | 101.0 | 105.7 | ||||||||
Exercise of Stock Options and Other Unvested Equity Awards | [2] | 47.2 | 41.7 | ||||||||
Diluted Weighted Average Common Shares Outstanding | 2,822.9 | 2,867.5 | |||||||||
Basic Net Earnings/(Loss) Per Common Share | [3] | $ 1.03 | $ 0.98 | ||||||||
Diluted Net Earnings/(Loss) Per Common Share | [3] | $ 1.00 | $ 0.96 | ||||||||
Discontinued Operations | |||||||||||
Earnings Per Share Reconciliation [Abstract] | |||||||||||
Net Earnings/(Loss) | $ (118) | $ (142) | |||||||||
Net Earnings Attributable to Noncontrolling Interest | 0 | 0 | |||||||||
Net Earnings/(Loss) Attributable to P&G (Diluted) | (118) | (142) | |||||||||
Preferred Dividends, Net of Tax Benefit | 0 | 0 | |||||||||
Net Earnings/(Loss) Attributable to P&G Available to Common Shareholders (Basic) | $ (118) | $ (142) | |||||||||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||||||||
Basic Weighted Average Common Shares Outstanding | 2,674.7 | 2,720.1 | |||||||||
Effect of Dilutive Securities | |||||||||||
Conversion of Preferred Shares | [1] | 101.0 | 105.7 | ||||||||
Exercise of Stock Options and Other Unvested Equity Awards | [2] | 47.2 | 41.7 | ||||||||
Diluted Weighted Average Common Shares Outstanding | 2,822.9 | 2,867.5 | |||||||||
Basic Net Earnings/(Loss) Per Common Share | [3] | $ (0.04) | $ (0.05) | ||||||||
Diluted Net Earnings/(Loss) Per Common Share | [3] | $ (0.04) | $ (0.05) | ||||||||
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EARNINGS PER SHARE - ANTIDILUTIVE SECURITIES (Details) - shares shares in Millions |
3 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|||
Employee Stock Option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | [1] | 26 | 69 | |
|
SHARE-BASED COMPENSATION AND POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
||||
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | |||||
Allocated Share-based Compensation Expense | $ 44 | $ 66 | |||
Pension and Other Retiree Benefits | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Defined Benefit Plan, Net Periodic Benefit Cost | [1] | 96 | 86 | ||
Other Postretirement Benefit Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Defined Benefit Plan, Net Periodic Benefit Cost | [1] | $ (19) | $ (24) | ||
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RISK MANAGEMENT ACTIVITIES AND FAIR VALUE MEASUREMENTS - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Jun. 30, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term Debt, Fair Value | $ 23,435 | $ 24,362 |
Long Term Debt, Current Maturities Measured at Fair Value | 1,723 | 2,761 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term Debt, Fair Value | 2,281 | 2,331 |
U.S. Government Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Maturities, Next Twelve Months, Amortized Cost Basis | 643 | 292 |
Available-for-sale Securities, Debt Maturities, Year Two Through Five, Amortized Cost Basis | 4,162 | 4,513 |
Corporate Bond Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Maturities, Next Twelve Months, Amortized Cost Basis | 387 | 382 |
Available-for-sale Securities, Debt Maturities, Year Two Through Five, Amortized Cost Basis | $ 1,399 | $ 1,018 |
RISK MANAGEMENT ACTIVITIES AND FAIR VALUE MEASUREMENTS - ASSETS MEASURED AT FAIR VALUE ON A RECURRING BASIS (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Jun. 30, 2016 |
---|---|---|
Fair Value Asset | $ 6,644 | $ 6,274 |
U.S. Government Securities | ||
Fair Value Asset | 4,826 | 4,839 |
Corporate Bond Securities | ||
Fair Value Asset | 1,789 | 1,407 |
Other Investments | ||
Fair Value Asset | $ 29 | $ 28 |
RISK MANAGEMENT ACTIVITIES AND FAIR VALUE MEASUREMENTS - DERIVATIVE NOTIONAL AMOUNTS AND FAIR VALUE (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Jun. 30, 2016 |
---|---|---|
Derivatives Not Designated as Hedging Instruments | Foreign Currency Contracts | ||
Derivative [Line Items] | ||
Notional Amount | $ 4,641 | $ 6,482 |
Fair Value Asset/(Liability) | (20) | (10) |
Derivatives in Cash Flow Hedging Relationships | Foreign Currency Contracts | ||
Derivative [Line Items] | ||
Notional Amount | 798 | 798 |
Fair Value Asset/(Liability) | 18 | 31 |
Derivatives in Fair Value Hedging Relationships | Interest Rate Contracts | ||
Derivative [Line Items] | ||
Notional Amount | 5,013 | 4,993 |
Fair Value Asset/(Liability) | 343 | 371 |
Derivatives in Net Investment Hedging Relationships | ||
Derivative [Line Items] | ||
Notional Amount | 3,013 | 3,013 |
Fair Value Asset/(Liability) | $ (121) | $ (87) |
RISK MANAGEMENT ACTIVITIES AND FAIR VALUE MEASUREMENTS - GAIN (LOSS) ON DERIVATIVE INSTRUMENTS (EFFECTIVE PORTION) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Jun. 30, 2016 |
|
Derivatives in Cash Flow Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Recognized in AOCI on Derivatives (Effective Portion) | $ (4) | $ (2) |
Derivatives in Cash Flow Hedging Relationships | Interest Rate Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Recognized in AOCI on Derivatives (Effective Portion) | (2) | (2) |
Derivatives in Cash Flow Hedging Relationships | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Recognized in AOCI on Derivatives (Effective Portion) | (2) | 0 |
Derivatives in Net Investment Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Recognized in AOCI on Derivatives (Effective Portion) | $ (74) | $ (53) |
RISK MANAGEMENT ACTIVITIES AND FAIR VALUE MEASUREMENTS - GAIN (LOSS) ON DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Millions |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
||||||||
Derivatives Not Designated as Hedging Instruments | Foreign Currency Contracts | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain/(Loss) Recognized in Earnings | [1] | $ (8) | $ (62) | ||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain/(Loss) Reclassified from AOCI into Earnings | [2] | (8) | (7) | ||||||
Derivatives in Cash Flow Hedging Relationships | Interest Rate Contracts | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain/(Loss) Reclassified from AOCI into Earnings | [2] | 0 | 2 | ||||||
Derivatives in Cash Flow Hedging Relationships | Foreign Currency Contracts | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain/(Loss) Reclassified from AOCI into Earnings | [2] | (8) | (9) | ||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain/(Loss) Recognized in Earnings | [3] | 0 | 0 | ||||||
Derivatives in Fair Value Hedging Relationships | Interest Rate Contracts | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain/(Loss) Recognized in Earnings | [3] | (28) | 89 | ||||||
Derivatives in Fair Value Hedging Relationships | Debt | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain/(Loss) Recognized in Earnings | [3] | 28 | (89) | ||||||
Derivatives in Net Investment Hedging Relationships | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain/(Loss) Recognized in Earnings | [3] | $ 0 | $ 0 | ||||||
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - CHANGES IN AOCI AND RECLASSIFICATION OUT OF AOCI (Details) - USD ($) $ in Millions |
3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Jun. 30, 2016 |
||||||||
Accumulated Other Comprehensive Income/(Loss) | $ (15,943) | $ (15,907) | ||||||||
OCI before Reclassifications | (133) | |||||||||
Other Comprehensive Income (Loss), Net of Tax | (36) | $ (966) | ||||||||
Hedges | ||||||||||
Accumulated Other Comprehensive Income/(Loss) | (2,756) | (2,641) | ||||||||
OCI before Reclassifications | [1] | (123) | ||||||||
Other Comprehensive Income (Loss), Net of Tax | (115) | |||||||||
Investment Securities | ||||||||||
Accumulated Other Comprehensive Income/(Loss) | 21 | 34 | ||||||||
OCI before Reclassifications | [1] | (10) | ||||||||
Other Comprehensive Income (Loss), Net of Tax | (13) | |||||||||
Amounts Reclassified from AOCI | ||||||||||
Other Comprehensive Income (Loss), Net of Tax | 97 | |||||||||
Amounts Reclassified from AOCI | Hedges | ||||||||||
Other Comprehensive Income (Loss), Net of Tax | [2],[3] | 8 | ||||||||
Amounts Reclassified from AOCI | Investment Securities | ||||||||||
Other Comprehensive Income (Loss), Net of Tax | [2],[3] | (3) | ||||||||
Pension and Other Retiree Benefits | ||||||||||
Accumulated Other Comprehensive Income/(Loss) | (5,705) | (5,798) | ||||||||
OCI before Reclassifications | [1] | 1 | ||||||||
Other Comprehensive Income (Loss), Net of Tax | 93 | |||||||||
Pension and Other Retiree Benefits | Amounts Reclassified from AOCI | ||||||||||
Other Comprehensive Income (Loss), Net of Tax | [2],[3] | 92 | ||||||||
Financial Statement Translation | ||||||||||
Accumulated Other Comprehensive Income/(Loss) | (7,503) | $ (7,502) | ||||||||
OCI before Reclassifications | (1) | |||||||||
Other Comprehensive Income (Loss), Net of Tax | (1) | |||||||||
Financial Statement Translation | Amounts Reclassified from AOCI | ||||||||||
Other Comprehensive Income (Loss), Net of Tax | $ 0 | |||||||||
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - NET OF TAX EXPENSE (BENEFIT) (Details) $ in Millions |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
| ||||||
Hedges | ||||||
Other Comprehensive Income (Loss) before Reclassifications, Tax | $ (68) | [1] | ||||
Investment Securities | ||||||
Other Comprehensive Income (Loss) before Reclassifications, Tax | (4) | [1] | ||||
Pension and Other Retiree Benefits | ||||||
Other Comprehensive Income (Loss) before Reclassifications, Tax | 9 | [1] | ||||
Amounts Reclassified from AOCI | Hedges | ||||||
Other Comprehensive Income (Loss), Tax | 0 | [2] | ||||
Amounts Reclassified from AOCI | Investment Securities | ||||||
Other Comprehensive Income (Loss), Tax | 0 | [2] | ||||
Amounts Reclassified from AOCI | Pension and Other Retiree Benefits | ||||||
Other Comprehensive Income (Loss), Tax | $ 35 | [2] | ||||
|
RESTRUCTURING PROGRAM - ADDITIONAL INFORMATION (Details) $ in Millions |
3 Months Ended | 60 Months Ended | 63 Months Ended | 72 Months Ended |
---|---|---|---|---|
Sep. 30, 2016
USD ($)
employee
|
Jun. 30, 2016
USD ($)
|
Sep. 30, 2016
employee
|
Jun. 30, 2017
USD ($)
|
|
Restructuring Charges | $ 168 | $ 4,900 | ||
Minimum | ||||
Restructuring and Related Cost, Amounts Historically Incurred | 250 | |||
Maximum | ||||
Restructuring and Related Cost, Amounts Historically Incurred | 500 | |||
Selling, General and Administrative Expense | ||||
Restructuring Charges | 21 | |||
Cost of Products Sold | ||||
Restructuring Charges | $ 129 | |||
Non-Manufacturing Overhead Personnel | ||||
Restructuring and Related Cost, Number of Positions Eliminated, Period Percent | 24.00% | |||
Restructuring and Related Cost, Number of Severance Packages Executed | employee | 80 | 9,620 | ||
Separations | ||||
Restructuring Charges | $ 47 | 2,300 | ||
Restructuring and Related Cost, Number of Severance Packages Executed | employee | 520 | 17,590 | ||
Asset-related Costs | ||||
Restructuring Charges | $ 105 | 1,400 | ||
Other Costs | ||||
Restructuring Charges | $ 16 | $ 1,200 | ||
Scenario, Forecast | ||||
Restructuring and Related Cost, Expected Cost | $ 5,500 | |||
Scenario, Forecast | Non-Manufacturing Overhead Personnel | Minimum | ||||
Restructuring And Related Cost, Expected Number Of Positions Eliminated, Percent | 25.00% | |||
Scenario, Forecast | Non-Manufacturing Overhead Personnel | Maximum | ||||
Restructuring And Related Cost, Expected Number Of Positions Eliminated, Percent | 30.00% |
RESTRUCTURING PROGRAM - RESTRUCTURING RESERVE BY TYPE OF COSTS (Details) - USD ($) $ in Millions |
3 Months Ended | 60 Months Ended |
---|---|---|
Sep. 30, 2016 |
Jun. 30, 2016 |
|
Restructuring Reserve [Roll Forward] | ||
Accrual Balance June 30, 2016 | $ 315 | |
Restructuring Charges | 168 | $ 4,900 |
Cash Spent | (71) | |
Charges Against Assets | (105) | |
Accrual Balance September 30, 2016 | 307 | 315 |
Separations | ||
Restructuring Reserve [Roll Forward] | ||
Accrual Balance June 30, 2016 | 243 | |
Restructuring Charges | 47 | 2,300 |
Cash Spent | (41) | |
Charges Against Assets | 0 | |
Accrual Balance September 30, 2016 | 249 | 243 |
Asset-related Costs | ||
Restructuring Reserve [Roll Forward] | ||
Accrual Balance June 30, 2016 | 0 | |
Restructuring Charges | 105 | 1,400 |
Cash Spent | 0 | |
Charges Against Assets | (105) | |
Accrual Balance September 30, 2016 | 0 | 0 |
Other Costs | ||
Restructuring Reserve [Roll Forward] | ||
Accrual Balance June 30, 2016 | 72 | |
Restructuring Charges | 16 | 1,200 |
Cash Spent | (30) | |
Charges Against Assets | 0 | |
Accrual Balance September 30, 2016 | $ 58 | $ 72 |
RESTRUCTURING PROGRAM - RESTRUCTURING COSTS PER SEGMENT (Details) - USD ($) $ in Millions |
3 Months Ended | 60 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Jun. 30, 2016 |
|||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 168 | $ 4,900 | ||
Beauty | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 19 | |||
Grooming | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 5 | |||
Health Care | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 4 | |||
Fabric & Home Care | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 27 | |||
Baby, Feminine & Family Care | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 54 | |||
Corporate | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | [1] | $ 59 | ||
|
COMMITMENTS AND CONTINGENCIES - ADDITIONAL INFORMATION (Details) $ in Millions |
3 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
audit
taxable_jurisdiction
| |
Loss Contingencies [Line Items] | |
Number of Taxable Jurisdictions | taxable_jurisdiction | 140 |
Liability for Uncertain Tax Positions, Current | $ | $ 200 |
Minimum | |
Loss Contingencies [Line Items] | |
Number of Audits Typically Underway | 50 |
Maximum | |
Loss Contingencies [Line Items] | |
Number of Audits Typically Underway | 60 |
DISCONTINUED OPERATIONS - ADDITIONAL INFORMATION (Details) shares in Millions, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
shares
|
Feb. 29, 2016
USD ($)
shares
|
Jul. 09, 2015 |
|
Beauty Brands | ||||
Disposal Groups - Number of Product Categories | 4 | |||
Disposal Groups - Number of Brands | 41 | |||
Disposal Groups - Expected Consideration Received (Monetary) | $ 11,400 | |||
Disposal Groups - Expected Consideration Received (Shares) | shares | 105.0 | |||
Disposal Groups - Expected Consideration Equity of New Company | $ 9,400 | |||
Disposal Groups - Expected Consideration, Value of Debt Assume | $ 1,900 | |||
Batteries | ||||
Disposal Group, Cash Contributed in Re-Capitalization | $ 1,900 | |||
Disposal Groups - Consideration Received (Shares) | shares | 52.5 | |||
Intangible Asset Impairment Charges | $ 402 | |||
Intangible Asset Impairment Charges After Tax | 350 | |||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | $ 422 | |||
Disposal Group, Including Discontinued Operation, Consideration | $ 4,200 |
DISCONTINUED OPERATIONS - ADDITIONAL INFORMATION ON TABLES (Details) - Beauty Brands - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Jun. 30, 2016 |
|
Disposal Groups - Transition Cost | $ 135 | |
Disposal Groups - Total Loan Draw | $ 1,900 | |
Disposal Groups - Term B Loan Draw | $ 1,000 |
DISCONTINUED OPERATIONS - NET EARNINGS FROM DISCONTINUED OPERATIONS (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Net Earnings/(Loss) from Discontinued Operations | $ (118) | $ (142) |
Beauty Brands | ||
Net Earnings/(Loss) from Discontinued Operations | (118) | 150 |
Batteries | ||
Net Earnings/(Loss) from Discontinued Operations | 0 | (292) |
Discontinued Operations | ||
Net Earnings/(Loss) from Discontinued Operations | $ (118) | $ (142) |
DISCONTINUED OPERATIONS - NET EARNINGS FROM DISCONTINUED OPERATIONS FOR BEAUTY BRANDS (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Net Earnings/(Loss) from Discontinued Operations | $ (118) | $ (142) |
Beauty Brands | ||
Net Sales, Discontinued Operations | 1,159 | 1,219 |
Cost of Products Sold, Discontinued Operations | 450 | 385 |
Selling, General and Administrative Expense, Discontinued Operations | 783 | 647 |
Interest Expense, Discontinued Operations | 14 | 0 |
Other Income, Discontinued Operations | 16 | 1 |
Earnings/(Loss) from Discontinued Operations before Income Taxes | (72) | 188 |
Income Taxes on Discontinued Operations | 46 | 38 |
Net Earnings/(Loss) from Discontinued Operations | $ (118) | $ 150 |
DISCONTINUED OPERATIONS - CASH FLOWS FOR BEAUTY BRANDS (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Gain (Loss) on Disposition of Business | $ 75 | $ 7 |
Beauty Brands | ||
Depreciation and Amortization, Discontinued Operations | 24 | 28 |
Gain (Loss) on Disposition of Business | 13 | 0 |
Capital Expenditure, Discontinued Operations | $ 38 | $ 18 |
DISCONTINUED OPERATIONS - MAJOR COMPONENTS OF ASSETS AND LIABILITIES FOR BEAUTY BRANDS (Details) - Beauty Brands - USD ($) $ in Millions |
Sep. 30, 2016 |
Jun. 30, 2016 |
---|---|---|
Cash, Discontinued Operations | $ 387 | $ 40 |
Restricted Cash, Discontinued Operations | 0 | 996 |
Accounts Receivable, Discontinued Operations | 475 | 384 |
Inventories, Discontinued Operations | 500 | 494 |
Prepaid Expenses and Other Current Assets, Discontinued Operations | 178 | 126 |
Property, Plant and Equipment, Net, Current, Discontinued Operations | 627 | 629 |
Goodwill and Intangible Assets, Net, Current, Discontinued Operations | 4,426 | 4,411 |
Other Noncurrent Assets, Current, Discontinued Operations | 478 | 105 |
Total Assets Held for Sale, Current, Discontinued Operations | 7,071 | 7,185 |
Accounts Payable, Discontinued Operations | 171 | 148 |
Accrued and Other Liabilities, Discontinued Operations | 342 | 384 |
Noncurrent Deferred Tax Liabilities, Current, Discontinued Operations | 337 | 370 |
Long-term Debt, Discontinued Operations | 1,887 | 996 |
Other Noncurrent Liabilities, Current, Discontinued Operations | 393 | 445 |
Total Liabilities Held for Sale, Discontinued Operations | $ 3,130 | $ 2,343 |
DISCONTINUED OPERATIONS - NET EARNINGS FROM DISCONTINUED OPERATIONS FOR BATTERIES (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Net Earnings/(Loss) from Discontinued Operations | $ (118) | $ (142) |
Batteries | ||
Net Sales, Discontinued Operations | 506 | |
Earnings Before Impairment Charges and Income Taxes, Discontinued Operations | 93 | |
Other Expense, Discontinued Operations | (402) | |
Income Tax (Expense)/Benefit on Discontinued Operations | 17 | |
Net Earnings/(Loss) from Discontinued Operations | $ 0 | $ (292) |
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