pg 2010 annual report financial statements

8/8/2019 PG 2010 Annual Report Financial Statements

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CONSOLIDATED STATEMENTS OF EARNINGS

Amounts in millions except per share amounts; Years ended June 30 2010 2009 2008

NET SALES $78,938 $76,694 $79,257Cost of products sold 37,919 38,690 39,261Selling, general and administrative expense 24,998 22,630 24,017OPERATING INCOME 16,021 15,374 15,979Interest expense 946 1,358 1,467

(28) 397 373

15,047 14,413 14,885Income taxes on continuing operations 4,101 3,733 3,594NET EARNINGS FROM CONTINUING OPERATIONS 10,946 10,680 11,291

NET EARNINGS FROM DISCONTINUED OPERATIONS 1,790 2,756 784NET EARNINGS $12,736 $13,436 $12,075

BASIC NET EARNINGS PER COMMON SHARE:Earnings from continuing operations $3.70 $3.55 $3.61Earnings from discontinued operations 0.62 0.94 0.25BASIC NET EARNINGS PER COMMON SHARE 4.32 4.49 3.86DILUTED NET EARNINGS PER COMMON SHARE:Earnings from continuing operations 3.53 3.39 3.40Earnings from discontinued operations 0.58 0.87 0.24DILUTED NET EARNINGS PER COMMON SHARE 4.11 4.26 3.64DIVIDENDS PER COMMON SHARE $1.80 $1.64 $1.45

See accompanying Notes to Consolidated Financial Statements.

Other non-operating income /(expense) , netEARNINGS FROM CONTINUING OPERATIONS BEFOREINCOME TAXES


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CONSOLIDATED BALANCE SHEETS

Amounts in millions; June 30 2010 2009

ASSETSCURRENT ASSETS

Cash and cash equivalents $2,879 $4,781Accounts receivable 5,335 5,836INVENTORIES

Materials and supplies 1,692 1,557Work in process 604 672Finished goods 4,088 4,651

Total inventories 6,384 6,880Deferred income taxes 990 1,209Prepaid expenses and other current assets 3,194 3,199TOTAL CURRENT ASSETS 18,782 21,905PROPERTY, PLANT AND EQUIPMENT

Buildings 6,868 6,724Machinery and equipment 29,294 29,042Land 850 885

Total property, plant and equipment 37,012 36,651Accumulated depreciation (17,768) (17,189)

NET PROPERTY, PLANT AND EQUIPMENT 19,244 19,462GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill 54,012 56,512Trademarks and other intangible assets, net 31,636 32,606

NET GOODWILL AND OTHER INTANGIBLE ASSETS 85,648 89,118OTHER NONCURRENT ASSETS 4,498 4,348TOTAL ASSETS $128,172 $134,833



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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

BALANCE JUNE 30, 2007 3,131,946 $3,990 $1,406 $59,030 $(1,308) Net earnings Other comprehensive income:

Financial statement translation Hedges and investment securities, net of $1,664 tax Defined benefit retirement plans, net of $120 tax Total comprehensive income

Dividends to shareholders:Common Preferred, net of tax benefits

Treasury purchases (148,121) Employee plan issuances 43,910 12 1,272 Preferred stock conversions 4,982 (40) 5 ESOP debt impacts (17)

Noncontrolling interest BALANCE JUNE 30, 2008 3,032,717 4,002 1,366 60,307 (1,325)

Net earnings Other comprehensive income:

Financial statement translation Hedges and investment securities, net of $452 tax Defined benefit retirement plans, net of $879 tax

Total comprehensive income

Dividends to shareholders:Common Preferred, net of tax benefits

Treasury purchases (98,862) Employee plan issuances 16,841 5 804 Preferred stock conversions 4,992 (42) 7 Shares tendered for Folgers coffee subsidiary (38,653) ESOP debt impacts (15)

Noncontrolling interest BALANCE JUNE 30, 2009 2,917,035 4,007 1,324 61,118 (1,340)

Net earningsOther comprehensive income:

Financial statement translation

Hedges and investment securities, net of $520 taxDefined benefit retirement plans, net of $465 taxTotal comprehensive income

Dividends to shareholders:CommonPreferred, net of tax benefits

Treasury purchases (96,759) Employee plan issuances 17,616 1 574 Preferred stock conversions 5,579 (47) 7 ESOP debt impacts (10

Noncontrolling interest (2) BALANCE JUNE 30, 2010 2,843,471 $4,008 $1,277 $61,697 $(1,350) $


Dollars in millions/Shares in thousands

CommonShares Outstanding

CommonStock

PreferredStock

AdditionalPaid-In Capital

Reserve forESOP DebRetiremen

Cumulative impact for adoption of new accounting guidance 1

Cumulative impact for adoption of new accounting guidance 1

1 Cumulative impact of adopting new accounting guidance relates to: 2008 - uncertainty in income taxes; 2009 - split-dollar life insurance arrangments.


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CONSOLIDATED STATEMENTS OF CASH FLOWS

Amounts in millions; Years ended June 30 2010 2009 2008

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR $4,781 $3,313 $5,354

OPERATING ACTIVITIES Net earnings 12,736 13,436 12,075

Depreciation and amortization 3,108 3,082 3,166Share-based compensation expense 453 516 555Deferred income taxes 36 596 1,214Gain on sale of businesses (2,670) (2,377) (284)Change in accounts receivable (14) 415 432Change in inventories 86 721 (1,050)Change in accounts payable, accrued and other liabilities 2,446 (742) 297Change in other operating assets and liabilities (305) (758) (1,270)Other 196 30 (127)TOTAL OPERATING ACTIVITIES 16,072 14,919 15,008

INVESTING ACTIVITIESCapital expenditures (3,067) (3,238) (3,046)Proceeds from asset sales 3,068 1,087 928

Acquisitions, net of cash acquired (425) (368) (381)Change in investments (173) 166 (50)TOTAL INVESTING ACTIVITIES (597) (2,353) (2,549)

FINANCING ACTIVITIESDividends to shareholders (5,458) (5,044) (4,655)Change in short-term debt (1,798) (2,420) 2,650Additions to long-term debt 3,830 4,926 7,088Reductions of long-term debt (8,546) (2,587) (11,747)Treasury stock purchases (6,004) (6,370) (10,047)Impact of stock options and other 721 681 1,867TOTAL FINANCING ACTIVITIES (17,255) (10,814) (14,844)EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (122) (284) 344CHANGE IN CASH AND CASH EQUIVALENTS (1,902) 1,468 (2,041)CASH AND CASH EQUIVALENTS, END OF YEAR $2,879 $4,781 $3,313

SUPPLEMENTAL DISCLOSURECash payments for:

$1,184 $1,226 $1,373Income Taxes 4,175 3,248 3,499

Assets acquired through non-cash capital leases 20 8 13Divestiture of coffee business in exchange for shares of P&G stock - 2,466 -


Interest


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Financial Summary (Unaudited)

Amounts in millions, except per share amounts 2010 2009 2008 2007 Net Sales $78,938 $76,694 $79,257 $72,441Gross Margin 41,019 38,004 39,996 37,065Operating Income 16,021 15,374 15,979 14,485

Net Earnings from Continuing Operations 10,946 10,680 11,291 9,662 Net Earnings from Discontinued Operations 1,790 2,756 784 678 Net Earnings 12,736 13,436 12,075 10,340 Net Earnings Margin from Continuing Operations 13.9% 13.9% 14.2% 13.3%Basic Net Earnings per Common Share:

Earnings from continuing operations $3.70 $3.55 $3.61 $3.01

Earnings from discontinued operations 0.62 0.94 0.25 0.21Basic Net Earnings per Common Share 4.32 4.49 3.86 3.22Diluted Net Earnings per Common Share:

Earnings from continuing operations 3.53 3.39 3.40 2.84

Earnings from discontinued operations 0.58 0.87 0.24 0.20Diluted Net Earnings per Common Share 4.11 4.26 3.64 3.04Dividends per Common Share 1.80 1.64 1.45 1.28Research and Development Expense $1,950 $1,864 $1,946 $1,823Advertising Expense 8,576 7,519 8,520 7,799Total Assets 128,172 134,833 143,992 138,014Capital Expenditures 3,067 3,238 3,046 2,945Long-Term Debt 21,360 20,652 23,581 23,375Shareholders' Equity 61,439 63,382 69,784 67,012

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2006 2005$64,416 $53,210

32,549 26,391

12,551 9,6668,187 6,384

497 5398,684 6,92312.7% 12.0%

$2.63 $2.480.16 0.222.79 2.70

2.49 2.330.15 0.202.64 2.53

1.15 1.03$1,682 $1,538

7,010 5,804135,695 61,527

2,667 2,18135,976 12,88763,171 18,655

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pg 2010 annual report financial statements

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