kvorak wrote: Finally... somebody agrees. The reason people can't answer this question objectively is because it's the WRONG QUESTION, lol. Well said.
Feb. 5, 2010 03:47 PM EST
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From the Wires
P&G Reports Third Quarter Organic Sales, EPS and Cash Flow Growth
By: PR Newswire
Apr. 30, 2009 07:01 AM
(Logo: http://www.newscom.com/cgi-bin/prnh/20090115/CLTH035LOGO-a ) "We delivered good third quarter results in a very challenging macroeconomic environment," said Chairman of the Board and Chief Executive Officer Executive Summary
Key Financial Highlights Net sales for the quarter decreased eight percent to Operating margin increased 30 basis points, which included 60 basis points of incremental restructuring charges related to the Folgers transaction. The increase in operating margin was primarily due to lower SG&A which declined 13 percent for the quarter. SG&A as a percentage of net sales was down 170 basis points reflecting the benefit of lower marketing expenses while increasing media delivery. Gross margin was down 140 basis points as higher commodity costs and foreign exchange transaction impacts, primarily in developing regions, were partially offset by price increases and manufacturing cost savings. Diluted net earnings per share were Operating cash flow was The Company noted that it previously announced a 10 percent increase in quarterly dividends from Business Segment Discussion for the Quarter The following provides perspective on the Company's January - March quarter results by business segment. These results reflect the Company's decision to protect the long term structural profitability of the business, particularly in developing markets. This necessitated a number of pricing actions to offset significant transaction-related foreign exchange impacts. As stated earlier, these pricing actions, along with retailer and distributor destocking and slowing global market growth rates, negatively impacted volume, sales and net earnings results of the business segments. Beauty GBU
Health & Well-Being GBU
Household Care GBU
Fiscal Year Guidance For the 2009 fiscal year, the Company expects organic sales to grow by two to three percent. Net sales are expected to be down two to four percent driven primarily by unfavorable foreign exchange of about five percent. Operating margin, which includes about 50 basis points of incremental Folgers-related restructuring charges, is expected to be consistent with the prior fiscal year. The Company also stated that it is comfortable with analysts' current consensus earnings per share estimate of Forward-Looking Statements All statements, other than statements of historical fact included in this release, are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on financial data, market assumptions and business plans available only as of the time the statements are made, which may become out of date or incomplete. We assume no obligation to update any forward-looking statement as a result of new information, future events or other factors. Forward-looking statements are inherently uncertain, and investors must recognize that events could differ significantly from our expectations. In addition to the risks and uncertainties noted in this release, there are certain factors that could cause actual results to differ materially from those anticipated by some of the statements made. These include: (1) the ability to achieve business plans, including growing existing sales and volume profitably despite high levels of competitive activity, especially with respect to the product categories and geographical markets (including developing markets) in which the Company has chosen to focus; (2) the ability to successfully execute, manage and integrate key acquisitions and mergers and to achieve the cost and growth synergies in accordance with the stated goals of these transactions; (3) the ability to manage and maintain key customer relationships; (4) the ability to maintain key manufacturing and supply sources (including sole supplier and plant manufacturing sources); (5) the ability to successfully manage regulatory, tax and legal requirements and matters (including product liability, patent, intellectual property, and competition law matters), and to resolve pending matters within current estimates; (6) the ability to successfully implement, achieve and sustain cost improvement plans in manufacturing and overhead areas, including the Company's outsourcing projects; (7) the ability to successfully manage currency (including currency issues in volatile countries), debt, interest rate and commodity cost exposures and significant credit or liquidity issues; (8) the ability to manage continued global political and/or economic uncertainty and disruptions, especially in the Company's significant geographical markets, as well as any political and/or economic uncertainty and disruptions due to a global or regional credit crisis or terrorist and other hostile activities; (9) the ability to successfully manage competitive factors, including prices, promotional incentives and trade terms for products; (10) the ability to obtain patents and respond to technological advances attained by competitors and patents granted to competitors; (11) the ability to successfully manage increases in the prices of raw materials used to make the Company's products; (12) the ability to stay close to consumers in an era of increased media fragmentation; and (13) the ability to stay on the leading edge of innovation and maintain a positive reputation on our brands. For additional information concerning factors that could cause actual results to materially differ from those projected herein, please refer to our most recent 10-K, 10-Q and 8-K reports. About Procter & Gamble Three billion times a day, P&G brands touch the lives of people around the world. The company has one of the strongest portfolios of trusted, quality, leadership brands, including Pampers(R), Tide(R), Ariel(R), Always(R), Whisper(R), Pantene(R), Mach3(R), Bounty(R), Dawn(R), Gain(R), Pringles(R), Charmin(R), Downy(R), Lenor(R), Iams(R), Crest(R), Oral-B(R), Actonel(R), Duracell(R), Olay(R), Head & Shoulders(R), Wella(R), Gillette(R), Braun(R) and Fusion(R). The P&G community includes approximately 138,000 employees working in over 80 countries worldwide. Please visit http://www.pg.com for the latest news and in-depth information about P&G and its brands. The Procter & Gamble Company Exhibit 1: Non-GAAP Measures In accordance with the SEC's Regulation G, the following provides definitions of the non-GAAP measures used in the earnings release and the reconciliation to the most closely related GAAP measure. Organic Sales Growth: Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions, divestitures and foreign exchange from year-over-year comparisons. We believe this provides investors with a more complete understanding of underlying sales trends by providing sales growth on a consistent basis. The reconciliation of reported sales growth to organic sales in the January - March quarter is as follows:
Jan - Mar Net Foreign Acquisition/ Organic
Sales Exchange Divestiture Sales
Growth Impact Impact Growth
Beauty -9% -9% 0% 0%
Grooming -16% -12% 0% -4%
Health Care -12% -8% -2% -2%
Snacks and Pet Care -4% -6% 0% 2%
Fabric Care and Home Care -6% -9% 0% 3%
Baby Care and Family Care -2% -8% 0% 6%
Total P&G -8% -9% 0% 1%
Core EPS: This is a measure of the Company's earnings per share excluding the net tax benefits from a number of significant adjustments to tax reserves during fiscal year 2008 and the net impact from the sale of the Folgers business. The net impact from the sale of the Folgers business includes the results of the Folgers business reflected in discontinued operations, the gain on the sale of the Folgers business, and incremental restructuring charges incurred to offset the dilutive impact of the Folgers divestiture. These incremental restructuring charges represent restructuring costs incurred beyond the level expensed during the base period which were consistent with the Company's ongoing restructuring plans. We do not view these items to be part of our sustainable results. Management believes this measure provides an important perspective of underlying business trends and results and provides a more comparable measure of year-on-year earnings per share growth. The table below provides a reconciliation of reported diluted net earnings per share to core earnings per share:
JFM 08 JFM 09
Diluted Net Earnings Per Share $0.82 $0.84
Folgers Results and Gain on the Folgers
Transaction ($0.02) ($0.01)
Diluted Net Earnings - Continuing Operations Per
Share $0.80 $0.83
Significant Adjustments to Tax Reserves - -
Incremental Folgers-related Restructuring
Charges - $0.03
Core EPS $0.80 $0.86
Core EPS Growth 8%
Free Cash Flow: Free cash flow is defined as operating cash flow less capital spending. We view free cash flow as an important measure because it is one factor in determining the amount of cash available for dividends and discretionary investment. Free cash flow is also one of the measures used to evaluate senior management and is a factor in determining their at-risk compensation. Free Cash Flow Productivity: Free cash flow productivity is defined as the ratio of free cash flow to net earnings. The Company's long-term target is to generate free cash at or above 90 percent of net earnings. Free cash flow is also one of the measures used to evaluate senior management. The reconciliation of free cash flow and free cash flow productivity is provided below (amounts in millions):
Free Cash
Operating Capital Net Flow
Cash Flow Spending Free Cash Flow Earnings Productivity
Jan - Mar '09 $4,283 ($737) $3,546 $2,613 136%
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Consolidated Earnings Information
-----------
JFM QUARTER
-----------
JFM 09 JFM 08 % CHG
------ ------ -----
NET SALES $18,417 $20,026 (8)%
COST OF PRODUCTS SOLD 9,161 9,679 (5)%
----- -----
GROSS MARGIN 9,256 10,347 (11)%
SELLING, GENERAL & ADMINISTRATIVE
EXPENSE 5,526 6,334 (13)%
----- -----
OPERATING INCOME 3,730 4,013 (7)%
TOTAL INTEREST EXPENSE 336 364
OTHER NON-OPERATING INCOME, NET 93 10
-- --
EARNINGS FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 3,487 3,659 (5)%
INCOME TAXES 902 1,009
NET EARNINGS FROM
CONTINUING OPERATIONS 2,585 2,650 (2)%
NET EARNINGS FROM DISCONTINUED
OPERATIONS 28 60 (53)%
-- --
NET EARNINGS 2,613 2,710 (4)%
===== =====
EFFECTIVE TAX RATE FROM
CONTINUING OPERATIONS 25.9% 27.6%
PER COMMON SHARE:
BASIC NET EARNINGS -
CONTINUING OPERATIONS $0.87 $0.85
BASIC NET EARNINGS -
DISCONTINUED OPERATIONS $0.01 $0.02
----- -----
BASIC NET EARNINGS $0.88 $0.87
DILUTED NET EARNINGS -
CONTINUING OPERATIONS $0.83 $0.80 4%
DILUTED NET EARNINGS -
DISCONTINUED OPERATIONS $0.01 $0.02
----- -----
DILUTED NET EARNINGS $0.84 $0.82 2%
DIVIDENDS $0.40 $0.35 14%
AVERAGE DILUTED SHARES
OUTSTANDING 3,104.6 3,301.2
COMPARISONS AS A % OF NET SALES Basis Pt Chg
----------------
COST OF PRODUCTS SOLD 49.7% 48.3% 140
GROSS MARGIN 50.3% 51.7% (140)
SELLING, GENERAL &
ADMINISTRATIVE EXPENSE 30.0% 31.7% (170)
OPERATING MARGIN 20.3% 20.0% 30
EARNINGS FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES 18.9% 18.3% 60
NET EARNINGS
FROM
CONTINUING
OPERATIONS 14.0% 13.2% 80
----
FYTD
----
3/31/2009 3/31/2008 % CHG
--------- --------- -----
NET SALES $60,367 $60,863 (1)%
COST OF PRODUCTS SOLD 29,631 28,964 2%
------ ------
GROSS MARGIN 30,736 31,899 (4)%
SELLING, GENERAL &
ADMINISTRATIVE EXPENSE 18,186 18,998 (4)%
------ ------
OPERATING INCOME 12,550 12,901 (3)%
TOTAL INTEREST EXPENSE 1,029 1,112
OTHER NON-OPERATING INCOME, NET 520 396
--- ---
EARNINGS FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES 12,041 12,185 (1)%
INCOME TAXES 3,219 3,337
NET EARNINGS FROM
CONTINUING OPERATIONS 8,822 8,848 0%
NET EARNINGS FROM DISCONTINUED
OPERATIONS 2,143 211 916%
----- ---
NET EARNINGS 10,965 9,059 21%
====== =====
EFFECTIVE TAX RATE FROM
CONTINUING OPERATIONS 26.7% 27.4%
PER COMMON SHARE:
BASIC NET EARNINGS -
CONTINUING OPERATIONS $2.93 $2.82
BASIC NET EARNINGS -
DISCONTINUED OPERATIONS $0.72 $0.07
----- -----
BASIC NET EARNINGS $3.65 $2.89
DILUTED NET EARNINGS -
CONTINUING OPERATIONS $2.78 $2.66 5%
DILUTED NET EARNINGS -
DISCONTINUED OPERATIONS $0.68 $0.06
----- -----
DILUTED NET EARNINGS $3.46 $2.72 27%
DIVIDENDS $1.20 $1.05 14%
AVERAGE DILUTED SHARES
OUTSTANDING 3,172.9 3,332.5
COMPARISONS AS A % OF NET SALES Basis Pt Chg
----------------
COST OF PRODUCTS SOLD 49.1% 47.6% 150
GROSS MARGIN 50.9% 52.4% (150)
SELLING, GENERAL &
ADMINISTRATIVE EXPENSE 30.1% 31.2% (110)
OPERATING MARGIN 20.8% 21.2% (40)
EARNINGS FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 19.9% 20.0% (10)
NET EARNINGS FROM
CONTINUING OPERATIONS 14.6% 14.5% 10
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Cash Flows Information
---------------
Nine Months
Ended March 31
---------------
2009 2008
---- ----
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD $3,313 $5,354
OPERATING ACTIVITIES
NET EARNINGS 10,965 9,059
DEPRECIATION AND AMORTIZATION 2,228 2,270
SHARE-BASED COMPENSATION EXPENSE 368 396
DEFERRED INCOME TAXES 110 1,065
GAIN ON SALE OF BUSINESSES (2,384) (218)
CHANGES IN:
ACCOUNTS RECEIVABLE 249 253
INVENTORIES (313) (1,077)
ACCOUNTS PAYABLE, ACCRUED
AND OTHER LIABILITIES (1,013) (268)
OTHER OPERATING ASSETS
& LIABILITIES (257) (121)
OTHER (30) (164)
--- ----
TOTAL OPERATING ACTIVITIES 9,923 11,195
----- ------
INVESTING ACTIVITIES
CAPITAL EXPENDITURES (2,158) (1,852)
PROCEEDS FROM ASSET SALES 1,096 759
ACQUISITIONS, NET OF CASH ACQUIRED (315) 36
CHANGE IN INVESTMENTS 116 (188)
--- ----
TOTAL INVESTING ACTIVITIES (1,261) (1,245)
------ ------
FINANCING ACTIVITIES
DIVIDENDS TO SHAREHOLDERS (3,708) (3,385)
CHANGE IN SHORT-TERM DEBT (444) 1,739
ADDITIONS TO LONG-TERM DEBT 4,926 6,534
REDUCTIONS OF LONG-TERM DEBT (2,190) (10,227)
TREASURY STOCK PURCHASES (6,365) (8,035)
IMPACT OF STOCK
OPTIONS AND OTHER 583 1,436
--- -----
TOTAL FINANCING ACTIVITIES (7,198) (11,938)
------ -------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (343) 371
---- ---
CHANGE IN CASH AND CASH EQUIVALENTS 1,121 (1,617)
----- ------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $4,434 $3,737
====== ======
Certain amounts for prior periods were reclassified to conform with the
fiscal 2009 presentation
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Balance Sheet Information
March 31, 2009 June 30, 2008
-------------- -------------
CASH AND CASH EQUIVALENTS $4,434 $3,313
ACCOUNTS RECEIVABLE 5,744 6,761
TOTAL INVENTORIES 7,615 8,416
OTHER 4,215 6,025
----- -----
TOTAL CURRENT ASSETS 22,008 24,515
NET PROPERTY, PLANT AND EQUIPMENT 18,531 20,640
NET GOODWILL AND OTHER INTANGIBLE ASSETS 87,445 94,000
OTHER NON-CURRENT ASSETS 4,411 4,837
----- -----
TOTAL ASSETS $132,395 $143,992
======== ========
ACCOUNTS PAYABLE $5,138 $6,775
ACCRUED AND OTHER LIABILITIES 7,996 10,154
TAXES PAYABLE 1,329 945
DEBT DUE WITHIN ONE YEAR 18,366 13,084
------ ------
TOTAL CURRENT LIABILITIES 32,829 30,958
LONG-TERM DEBT 20,452 23,581
OTHER 18,339 19,959
------ ------
TOTAL LIABILITIES 71,620 74,498
------ ------
------ ------
TOTAL SHAREHOLDERS' EQUITY 60,775 69,494
------ ------
-------- --------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $132,395 $143,992
======== ========
Certain amounts for prior periods were reclassified to conform with the
fiscal 2009 presentation
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Earnings Information
---------------------------------
Three Months Ended March 31, 2009
---------------------------------
%Change Earnings From %Change Net Earnings %Change
Versus Continuing Versus From Versus
Net Year Operations Before Year Continuing Year
Sales Ago Income Taxes Ago Operations Ago
------------------------------------------------------------
Beauty GBU
Beauty $4,310 -9% $702 -10% $504 -14%
Grooming 1,652 -16% 434 -21% 306 -24%
Health and
Well-Being
GBU
Health
Care 3,226 -12% 878 -7% 564 -9%
Snacks and
Pet Care 764 -4% 93 -4% 51 -14%
Household
Care GBU
Fabric Care
and Home
Care 5,381 -6% 1,134 -2% 726 -7%
Baby Care
and Family
Care 3,456 -2% 693 -6% 423 -10%
Total
Business
Segments 18,789 -8% 3,934 -8% 2,574 -12%
Corporate (372) N/A (447) N/A 11 N/A
---- --- ---- --- -- ---
Total
Company 18,417 -8% 3,487 -5% 2,585 -2%
--------------------------------
Nine Months Ended March 31, 2009
--------------------------------
%Change Earnings From %Change Net Earnings %Change
Versus Continuing Versus From Versus
Net Year Operations Before Year Continuing Year
Sales Ago Income Taxes Ago Operations Ago
------------------------------------------------------------
Beauty GBU
Beauty $14,367 -1% 2,705 -3% $2,056 -5%
Grooming 5,802 -6% 1,663 -6% 1,200 -6%
Health and
Well-Being
GBU
Health
Care 10,461 -5% 2,818 -5% 1,868 -6%
Snacks and
Pet
Care 2,362 1% 286 1% 169 -5%
Household
Care GBU
Fabric Care
and Home
Care 17,661 0% 3,419 -10% 2,210 -14%
Baby Care
and Family
Care 10,694 4% 2,165 5% 1,355 3%
Total
Business
Segments 61,347 -1% 13,056 -5% 8,858 -7%
Corporate (980) N/A (1,015) N/A (36) N/A
---- --- ------ --- --- ---
Total
Company 60,367 -1% 12,041 -1% 8,822 0%
JANUARY - MARCH NET SALES INFORMATION
(Percent Change vs. Year Ago) *
Volume Volume
With Without
Acquisitions/ Acquisitions/ Foreign Net Sales
Divestitures Divestitures Exchange Price Mix/Other Growth
--------------------------------------------------------------
Beauty GBU
Beauty -5% -4% -9% 5% 0% -9%
Grooming -9% -9% -12% 7% -2% -16%
Health and Well-
Being GBU
Health Care -6% -5% -8% 5% -3% -12%
Snacks and
Pet Care -6% -6% -6% 10% -2% -4%
Household Care GBU
Fabric Care and
Home Care -5% -5% -9% 9% -1% -6%
Baby Care and
Family Care 0% 0% -8% 6% 0% -2%
Total Company -5% -5% -9% 7% -1% -8%
FISCAL YEAR 2009/2008 NET SALES INFORMATION
(Percent Change vs. Year Ago) *
Volume Volume
With Without
Acquisitions/ Acquisitions/ Foreign Net Sales
Divestitures Divestitures Exchange Price Mix/Other Growth
--------------------------------------------------------------
Beauty GBU
Beauty -1% 0% -2% 2% 0% -1%
Grooming -5% -5% -4% 4% -1% -6%
Health and Well-
Being GBU
Health Care -3% -2% -3% 4% -3% -5%
Snacks and
Pet Care -3% -3% -3% 9% -2% 1%
Household Care GBU
Fabric Care and
Home Care -3% -3% -3% 6% 0% 0%
Baby Care and
Family Care 1% 3% -2% 6% -1% 4%
Total Company -2% -2% -3% 5% -1% -1%
* These sales percentage changes are approximations based on quantitative
formulas that are consistently applied.
SOURCE The Procter & Gamble Company
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