-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XlA32zhacHkz0d8ZCUKcXPgG2j2oqEgoRoT3vNt0bK9J9PZNvMEF+YOI0wSA+EGt 8+dxTwVpTnXKUYEcDrZz3A== 0000080424-95-000004.txt : 19950215 0000080424-95-000004.hdr.sgml : 19950215 ACCESSION NUMBER: 0000080424-95-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950214 SROS: CSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROCTER & GAMBLE CO CENTRAL INDEX KEY: 0000080424 STANDARD INDUSTRIAL CLASSIFICATION: SOAP, DETERGENT, CLEANING PREPARATIONS, PERFUMES, COSMETICS [2840] IRS NUMBER: 310411980 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00434 FILM NUMBER: 95509887 BUSINESS ADDRESS: STREET 1: ONE PROCTER & GAMBLE PLZ CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5139831100 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended December 31, 1994 Commission file number 1-434 THE PROCTER & GAMBLE COMPANY (Exact name of registrant as specified in its charter) Ohio 31-0411980 (State of incorporation) (I.R.S. Employer Identification No.) One Procter & Gamble Plaza, Cincinnati, Ohio 45202 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code(513) 983-1100 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . There were 686,464,155 shares of Common Stock outstanding as of January 20, 1994. -1- PART I. FINANCIAL INFORMATION THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS
Millions of Dollars Three Months Ended Six Months Ended December 31 December 31 1994 1993 1994 1993 ------ ------ ------- ------- NET SALES $8,467 $7,788 $16,628 $15,352 Cost of products sold 4,832 4,394 9,428 8,622 Marketing, administrative, and other operating expenses 2,445 2,371 4,756 4,622 ------ ------ ------- ------- OPERATING INCOME 1,190 1,023 2,444 2,108 Interest expense 125 123 244 248 Other income/(expense) net 94 105 195 199 ------ ------ ------- ------- EARNINGS BEFORE INCOME TAXES 1,159 1,005 2,395 2,059 Income Taxes 409 352 853 736 ------ ------ ------- ------- NET EARNINGS $ 750 $ 653 $ 1,542 $ 1,323 ====== ====== ======= ======= PER COMMON SHARE: Net earnings $ 1.06 $ .92 $ 2.18 $ 1.87 Net earnings assuming full dilution $ .99 $ .85 $ 2.04 $ 1.74 Dividends per common share $ .35 $ .31 $ .70 $ .62 AVERAGE COMMON SHARES OUTSTANDING (in millions) 685.2 682.3
-2- THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET
Millions of Dollars December 31 June 30 ASSETS 1994 1994 ----------- --------- CURRENT ASSETS Cash and cash equivalents $ 2,184 $ 2,373 Marketable securities 177 283 Accounts receivable, less allowance for doubtful accounts 3,743 3,115 Inventories Raw materials and supplies 1,157 1,087 Work in process 201 213 Finished products 1,758 1,577 Deferred income taxes 720 716 Prepaid expenses and other current assets 966 624 -------- -------- 10,906 9,988 -------- -------- PROPERTY, PLANT, AND EQUIPMENT 16,645 15,896 LESS ACCUMULATED DEPRECIATION 6,227 5,872 -------- -------- 10,418 10,024 -------- -------- GOODWILL AND OTHER INTANGIBLE ASSETS 4,282 3,754 OTHER ASSETS 1,731 1,769 -------- -------- TOTAL $ 27,337 $ 25,535 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accruals $ 7,114 $ 6,665 Debt due within one year 1,691 1,375 -------- -------- 8,805 8,040 -------- -------- LONG-TERM DEBT 5,061 4,980 OTHER LIABILITIES 3,158 3,336 DEFERRED INCOME TAXES 508 347 SHAREHOLDERS' EQUITY Preferred stock 1,926 1,942 Common stock-shares outstanding-Dec. 31 686,017,433 686 684 -June 30 684,348,359 Additional paid-in capital 622 560 Currency translation adjustments (167) (63) Reserve for ESOP debt retirement (1,761) (1,787) Retained earnings 8,499 7,496 -------- -------- 9,805 8,832 -------- -------- TOTAL $ 27,337 $ 25,535 ======== ========
-3- THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Millions of Dollars Six Months Ended December 31 1994 1993 -------- -------- Cash and Cash Equivalents, beginning of year $2,373 $2,322 OPERATING ACTIVITIES Net earnings 1,542 1,323 Depreciation, depletion and amortization 603 557 Deferred income taxes 155 68 Increase in accounts receivable (447) (293) Increase in inventories (109) (50) Change in payables and accrued liabilities 36 (129) Decrease in other liabilities (308) (84) Other (202) (72) -------- -------- 1,270 1,320 -------- -------- INVESTING ACTIVITIES Capital expenditures (866) (760) Proceeds from asset sales and retirements 158 38 Acquisitions (616) (170) Marketable securities 106 (120) -------- -------- (1,218) (1,012) -------- -------- FINANCING ACTIVITIES Dividends to shareholders (531) (474) Additions to short-term debt 260 357 Additions to long-term debt 328 413 Reduction of long-term debt (312) (500) Proceeds from stock options 28 22 Purchase of treasury shares (9) (6) -------- -------- (236) (188) EFFECT OF EXCHANGE RATES ON CASH AND -------- -------- CASH EQUIVALENTS (5) (30) -------- -------- INCREASE IN CASH AND CASH EQUIVALENTS (189) 90 -------- -------- Cash and Cash Equivalents, end of period $2,184 $2,412 ====== ====== SUPPLEMENTAL DISCLOSURE Non-cash transactions Liabilities assumed in acquisitions 449 11 Reduction in employee stock ownership plan debt, guaranteed by the Company 26 24 Conversion of preferred to common stock 16 11 The interim financial statements are unaudited, but in the opinion of the Company include all adjustments, consisting only of normal recurring items, necessary for a fair presentation of the data.
-4- MANAGEMENT'S DISCUSSION AND ANALYSIS Worldwide net earnings for the quarter ending December 31, 1994 were $750 million, a 15% increase over the same quarter of the prior year. Earnings per share for the quarter were $1.06 compared to $.92 per share for the second quarter of the prior year, also a 15% increase. Worldwide net sales for the quarter increased 9% over the same quarter of the prior year to $8.5 billion. Strong unit volume growth continued, with worldwide unit shipments increasing 9% over the same quarter in the prior year. Acquisitions contributed 3% of the quarter's volume growth. Favorable exchange rates contributed approximately 2% to the sales and earnings growth for the quarter. Results for the first six months of the fiscal year reflect continued volume growth and cost control efforts throughout the company. Worldwide net earnings for the July-December period were $1,542, or $2.18 per share, a 17% increase over the same period of the prior year. Year to date sales were $16.6 billion, up 8% compared to $15.4 billion for this period of the prior fiscal year. Year to date volume has grown 10%. United States Net earnings in the United States increased 7% for the quarter, on a 6% sales growth versus the same period a year ago. The earnings increase reflects unit volume growth in all sectors, as well as benefits from restructuring actions begun in the prior year. Overall, unit volume increased 3%. The Laundry & Cleaning sector increased unit volume in spite of competitive pressure and responses to new initiatives in the Fabric Conditioners category. The Food & Beverage sector unit volume benefited from strong shipments in the Juice and Shortening & Oils categories. In the Paper sector, volume gains were driven by continued strength in the Tissue/Towel category. Diaper volume was down due, in part, to announced pricing reductions which will take effect in the January-March quarter. Driven by double-digit volume growth in the Hair Care category, the Beauty Care business also increased unit volume 2%, excluding the discontinued Clarion business. The Health Care business increased unit volume 2%. The primary driver of the growth was Aleve, offsetting lower volumes in respiratory attributable to a mild cough and cold season. Year to date earnings for the United States have increased 10% over the first half of the prior fiscal year. The earnings increase is attributable to a 6% increase in sales on a 5% unit volume growth, combined with the benefits of continued cost reduction efforts. Unit volume growth has been achieved by nearly all sectors. Food and Beverage year-to-date unit volume is down slightly due to the impact of the contraction of the coffee market following the crop freeze in Brazil. International Total international earnings increased 20% over the same quarter of the prior year on a sales increase of 8%. Unit volume increased 15%. The difference between sales and volume growth is largely due to competitive pricing in a number of markets. Favorable exchange rates contributed 4% to the sales growth and 5% to earnings growth. -5- Europe posted strong net earnings gains, as broadly-based unit volume growth of 14% and continued cost reduction benefits offset the impact of reduced pricing. The European Laundry business continues to be strong, attaining record market share. The balance of international achieved 16% unit volume growth. Cost control efforts contributed to attaining double digit growth in quarterly earnings for this segment. The devaluation of the Mexican peso did not adversely impact the quarterly results. Translation of the net assets in Mexico resulted in a charge to the cumulative translation component of shareholders' equity, without significant impact to total equity. The devaluation of the Mexican peso is not expected to significantly impact results for the fiscal year. For the first half of the fiscal year, International earnings have increased 22% over the prior comparable period. Year to date sales growth was 8% on a 15% unit volume growth, reflecting pricing actions in a number of markets. International unit volume has increased at a double digit rate across all regions except Latin America where the economic conditions in Mexico and Venezuela have slowed volume growth. Favorable exchange rates contributed 3% to the sales and earnings growth for the first six months. Restructuring Reserve Status In the year ending June 30, 1993, a pre-tax reserve of $2,402 million was established to cover a worldwide restructuring effort to consolidate manufacturing systems and reduce overhead costs. The primary elements of this reserve were costs related to fixed asset disposals and separation-related costs (86% of the total). The following information relates to the June 1993 reserve (in millions of dollars pre-tax):
Original Balance July-Dec Balance Reserve 6/30/94 Charges 12/31/94 --------- --------- ---------- -------- Separation-related costs $ 965 $ 596 $134 $ 462 Disposals of Fixed Assets 1,109 960 116 844 Other 328 227 34 193 ------ ------ ---- ------ $2,402 $1,783 $284 $1,499 ====== ====== ==== ====== Includes separation allowances and related benefits, out placement services, and personnel relocation costs. Includes closing, environmental remediation and contract termination costs for sites shut down or divested, offset by proceeds from asset sales. No cost element within this category exceeds 5% of the total reserve.
Execution of the restructuring program is on track and the cost of completing it is expected to approximate the original estimates. As anticipated, charges for the disposal of fixed assets will lag behind spending for separation-related programs. We have announced more than half of the sites and production modules to be closed in order to provide advance notice to employees. However, relatively few of these facilities have been totally shut down at this time. -6- Benefits continue to be obtained from the restructuring program. We estimate that incremental savings of almost $65 million after tax were achieved in the October-December quarter, bringing cumulative restructuring savings to approximately two-thirds of the $500 million after-tax objective established in June 1993. These amounts reflect estimated gross savings, which may be offset to some degree by other actions, such as pricing or research and development spending. Subsequent Event Based on the information currently available, the recent earthquake in Kobe, Japan will result in a $50 million after-tax charge to earnings in the January-March quarter for employee assistance, clean-up and repair of facilities and other incremental expenses directly associated with the earthquake. Four of five plants in Japan were not affected by the earthquake. The Akashi plant, which produces paper products, suffered some damage and is being repaired currently. Customers are being supplied from existing inventory and another P&G plant in Japan. P&G's Japan headquarters and technical center on Rokko Island suffered some damage, but based on initial assessments, the basic structure appears sound. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (11) Computation of Earnings per Share (12) Computation of Ratio of Earnings to Fixed Charges (27) Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter ended December 31, 1994. Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. THE PROCTER & GAMBLE COMPANY E. H. EATON - ------------------------------ E. H. Eaton Vice President and Comptroller (Principal Accounting Officer) Date: February 13, 1995 -7- EXHIBIT INDEX Exhibit No. Page No. (11) Computation of Earnings per Share 9 (12) Computation of Ratio of Earnings to Fixed Charges 10 (27) Financial Data Schedule 11 -8- EX-11 2 EXHIBIT (11) THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES =============================== COMPUTATION OF EARNINGS PER SHARE --------------------------------------------------- Dollars and Share Amounts in Millions
Three Months Ended Six Months Ended December 31 December 31 ------------------ ------------------ NET EARNINGS PER SHARE 1994 1993 1994 1993 - ---------------------------------------- ------ ------ ------ ------ Net earnings $ 750 $ 653 $1,542 $1,323 Deduct preferred stock dividends 26 26 51 50 ------ ------ ------ ------ Net earnings applicable to common stock $ 724 $ 627 $1,491 $1,273 - ---------------------------------------------- ====== ====== ====== ====== Average number of common shares outstanding 685.2 682.3 685.2 682.3 Per Share - ------------ Net earnings per share $ 1.06 $ .92 $ 2.18 $ 1.87 ====== ====== ====== ====== NET EARNINGS PER SHARE ASSUMING FULL DILUTION - ----------------------------------------------- Net earnings $ 750 $ 653 $1,542 $1,323 Deduct differential -- preferred vs. common dividends 11 13 23 26 ------ ------ ------ ------ Net earnings/(loss) applicable to common stock $ 739 $ 640 $1,519 $1,297 - ----------------------------------------------- ====== ====== ====== ====== Average number of common shares outstanding 685.2 682.3 685.2 682.3 Add potential effect of: Exercise of options 7.4 7.2 7.4 7.2 Conversion of preferred stock 53.0 54.2 53.0 54.2 ------ ------ ------ ------ Average number of common shares outstanding, assuming full dilution 745.6 743.7 745.6 743.7 ====== ====== ====== ====== Per share assuming full dilution - ----------------------------------------- Net earnings per share assuming full dilution $ .99 $ .85 $ 2.04 $ 1.74 ====== ====== ====== ======
-9- EX-12 3 EXHIBIT (12) THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES =============================== COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES ---------------------------------------------------------- Millions of Dollars
Six Months Years Ended June 30 Ended Dec. 31 ----------------------------------------------- --------------- 1990 1991 1992 1993 1994 1993 1994 ----- ----- ----- ----- ----- ----- ----- EARNINGS AS DEFINED - ---------------------------------- Earnings from operations before income taxes after eliminating undistributed earnings of 20% to 50% owned affiliates $2,401 $2,652 $2,870 $ 294 $3,307 $2,043 $2,414 Fixed charges excluding capitalized interest 480 435 584 631 569 290 291 ------ ------ ------ ------ ------ ------ ------ TOTAL EARNINGS, AS DEFINED $2,881 $3,087 $3,454 $ 925 $3,876 $2,333 $2,705 ====== ====== ====== ====== ====== ====== ====== FIXED CHARGES, AS DEFINED - -------------------------------------------- Interest expense $ 442 $ 395 $ 510 $ 552 $ 482 $ 248 $ 244 1/3 of rental expense 38 40 74 79 87 42 47 ------ ------ ------ ------ ------ ------ ------ 480 435 584 631 569 290 291 Capitalized interest 3 17 25 25 19 10 5 ------ ------ ------ ------ ------ ------ ------ TOTAL FIXED CHARGES, AS DEFINED $ 483 $ 452 $ 609 $ 656 $ 588 $ 300 $ 296 ====== ====== ====== ====== ====== ====== ====== RATIO OF EARNINGS TO FIXED CHARGES 6.0 6.8 5.7 1.4 6.6 7.8 9.2
-10- EX-27 4
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000080424 THE PROCTER & GAMBLE COMPANY 1,000,000 U.S. DOLLARS 6-MOS JUN-30-1995 JUL-01-1994 DEC-31-1994 1 2,184 177 3,743 0 3,116 10,906 16,645 6,227 27,337 8,805 5,061 686 0 1,926 7,193 27,337 16,628 16,628 9,428 4,756 0 0 244 2,395 853 1,542 0 0 0 1,542 2.18 2.04
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