P&G First Quarter Sales and EPS Exceed Expectations

CINCINNATI, Oct. 29, 2009 /PRNewswire-FirstCall/ -- The Procter & Gamble Company (NYSE: PG) reported net sales of $19.8 billion for the July - September quarter which exceeded the Company's guidance. Organic sales growth was up two percent versus a guidance range of flat to minus three percent on better than expected results across most business segments. Diluted net earnings per share increased three percent to $1.06, above the Company's guidance range of $0.95 to $1.00. The Company raised its outlook for the October - December quarter and fiscal 2010 organic sales growth citing modestly higher expectation for market growth. The Company also increased the low end of its fiscal year guidance range by $0.03 per share to reflect the higher top-line growth projection.

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"Our September quarter results give us encouragement we are making the right choices to grow market share profitably," said President and Chief Executive Officer Bob McDonald . "We are investing in innovation, expanding our portfolio and improving consumer value to serve more consumers, in more parts of the world, more completely. We are driving simplification and improving execution while leveraging scale to create cost efficiencies that help fund these investments and accelerate growth."

Executive Summary

    --  Net sales for the quarter were $19.8 billion, a decrease of six percent
        that was primarily due to unfavorable foreign exchange impacts as the
        U.S. dollar remained above prior year levels.  The company had
        previously guided to a net sales decrease of seven to ten percent.
    --  Organic sales, which exclude the impacts of acquisitions, divestitures
        and foreign exchange, increased two percent.
    --  Diluted net earnings per share increased three percent to $1.06 for the
        July - September quarter.
    --  Operating margin increased 160 basis points for the quarter behind a 290
        basis point improvement in gross margin, partially offset by higher
        selling, general and administrative (SG&A) expenses.

    --  Operating cash flow was $4.6 billion for the first fiscal quarter.  Free
        cash flow, which is operating cash flow less capital spending, was $4.0
billion, an all-time record and over 120 percent of net earnings excluding the gain on the sale of Actonel in Japan.

Key Financial Highlights

Net sales declined six percent to $19.8 billion for the July - September quarter mainly due to unfavorable foreign exchange impacts of seven percent as the U.S. dollar strengthened versus key foreign currencies. Organic sales grew two percent as price increases and positive product mix more than offset volume declines. Unit volume decreased three percent largely due to a difficult pre-economic crisis base period comparison, market contractions, prior year divestitures and share losses in some categories. These impacts were partially offset by new initiative launches in most segments. Organic volume, which excludes the impact of acquisitions and divestitures, was down two percent for the quarter with the Central & Eastern Europe/Middle East/Africa (CEEMEA) region accounting for over half of the Company's year-on-year quarterly volume decline. Price increases taken primarily in developing regions to offset local currency devaluations added three percent to net sales. Positive geographic product mix increased net sales by one percent.

Diluted net earnings per share were $1.06, an increase of three percent for the quarter. Net earnings decreased one percent primarily due to lower net sales, partially offset by the gain on the sale of Actonel in Japan, which was included in net earnings from discontinued operations.

Diluted net earnings per share from continuing operations increased one percent to $0.97. Net earnings from continuing operations were down three percent behind negative foreign currency impacts, lower net sales and higher base period divestiture gains on minor brands, partially offset by lower commodity and media costs and manufacturing cost savings in the current period. Core EPS, which is earnings per share from continuing operations excluding incremental Folgers-related restructuring charges in the base period, was in line with the prior year period.

Operating margin increased 160 basis points versus the prior year period driven by higher gross margin, partially offset by higher SG&A as a percentage of net sales. Gross margin expanded 290 basis points to 52.6 percent of net sales behind price increases, lower commodity costs and manufacturing cost savings. SG&A as a percentage of net sales increased 130 basis points due to negative foreign currency impacts.

Operating cash flow for the quarter was $4.6 billion, an increase of 32 percent mainly due to reductions in working capital balances. Free cash flow was $4.0 billion and over 120 percent of net earnings excluding the gain on the sale of Actonel in Japan. Capital expenditures were 2.8 percent of net sales.

Business Segment Discussion

Beauty and Grooming GBU

    --  Beauty net sales were down five percent for the quarter to $4.9 billion
        on a two percent decline in unit volume.  Organic sales grew two
        percent.  Unfavorable foreign exchange impacted net sales by seven
        percent.  Price increases and positive product mix added three percent
        and one percent to net sales, respectively.  Organic volume, which
        excludes acquisitions and divestitures, was down one percent mainly due
        to volume declines in the CEEMEA region and in the more discretionary
        businesses of Professional Salon and Prestige.  Hair Care volume grew
        low single digits behind initiative-driven growth of Pantene, Head &
        Shoulders and Rejoice and delivered growth in every region except
        CEEMEA.  Professional Salon volume declined double digits due to the
        exit of non-strategic businesses and continued market contractions.
        Prestige volume decreased high single digits primarily due to the
        continued contraction of the fragrance market, partially offset by
        double-digit growth of SK-II.  Female Beauty volume was down mid-single
        digits primarily due to lower shipments in CEEMEA, share losses on
        non-strategic personal cleansing brands, lower merchandising and
        initiative activity in cosmetics and the fiscal 2009 divestiture of
        Noxzema.  Net earnings decreased one percent for the quarter to $777
million as negative foreign currency impacts and lower net sales were mostly offset by lower overhead and marketing costs and manufacturing cost savings.
    --  Grooming net sales in the first fiscal quarter decreased 11 percent to
        $1.9 billion.  Organic sales declined two percent.  Unfavorable foreign
        exchange and lower unit volume reduced net sales by nine percent and
        eight percent, respectively.  These impacts were partially offset by
        positive pricing impacts of six percent.  Volume in Male Blades and
        Razors declined high single digits behind market contractions.  Gillette
        Fusion volume continued to grow but was more than offset by volume
        declines in legacy shaving systems.  Volume in Male Personal Care
        declined high single digits behind lower shipments of shave preparation
        products due to increased competitive promotional activity.  Volume in
        Braun was down double digits mainly due to market contractions,
        particularly in home and hair care appliances.  Net earnings declined 21
        percent versus the prior year period to $351 million primarily driven by
        lower net sales and negative foreign currency impacts.

Health & Well-Being GBU

    --  Health Care net sales declined four percent to $3.0 billion for the
        quarter.  Organic sales increased four percent driven by positive
        pricing impacts of three percent and improved product mix of one
        percent.  Unfavorable foreign exchange reduced net sales by eight
        percent.  Unit volume was consistent with the prior year period as
        growth in developed regions was offset by a decline in developing
        regions, primarily CEEMEA.  Personal Health Care volume was in line with
        the prior year period as growth in diagnostics products was offset by
        lower shipments of digestive health products in North America and
        shipment delays in CEEMEA due to a distributor transition.  Feminine
        Care volume declined low single digits mainly due to increased
        competitive activity in CEEMEA, partially offset by growth in Asia.
        Oral Care volume was in line with the prior year period as
        initiative-driven growth in Western Europe and Latin America was offset
        by market contractions in Asia and CEEMEA.  Net earnings increased nine
        percent to $550 million for the first fiscal quarter behind SG&A cost
        reductions, a pricing-driven expansion of gross margin and a receipt
        from the favorable settlement of a legal dispute, partially offset by
        negative foreign currency impacts.
    --  Snacks and Pet Care net sales were down six percent for the quarter to
        $755 million on a 10 percent decline in unit volume.  Organic sales
        declined three percent due to a decline in Snacks, partially offset by
        growth in Pet Care.  Unfavorable foreign exchange reduced net sales by
        three percent.  Price increases to offset increased commodity costs and
        currency devaluations contributed six percent to net sales.  Relatively
        better volume results in Pet Care, which has higher than segment average
        selling prices, improved product mix, adding one percent to net sales.
        Volume in Snacks decreased double digits due to lower merchandising
        activity in North America following the Super Stacks initiative, which
        included a price increase, and market contractions in CEEMEA.  Volume in
        Pet Care was down low single digits mainly due to the contraction of the
        premium nutrition category, partially offset by the continued success of
        new product initiatives launched in previous quarters.  Net earnings
        were up 35 percent in the first quarter to $74 million resulting from
        price increases, lower commodity costs and manufacturing cost savings.

Household Care GBU

    --  Fabric Care and Home Care net sales decreased five percent to $6.1
billion for the quarter. Organic sales grew two percent as positive pricing impacts of three percent and improved product mix of one percent were partially offset by a two percent decline in unit volume. Unfavorable foreign exchange reduced net sales by seven percent. Fabric Care volume was down low single digits due to trade inventory reductions in North America and global market share declines, partially offset by the new product launches and growth in Western Europe behind incremental merchandising activities. Home Care volume grew mid-single digits primarily due to new initiative launches in North America and Western Europe. Batteries volume declined mid-single digits due to market contractions, market share declines and trade inventory reductions. Net earnings grew 22 percent to $1.0 billion on price increases, taken in prior quarters, lower commodity costs and manufacturing cost savings.
    --  Baby Care and Family Care net sales declined five percent in the first
        fiscal quarter to $3.6 billion.  Organic sales grew one percent as the
        impact of price increases more than offset a one percent volume decline.
        Price increases, primarily taken in developing regions to offset local
        currency devaluations, added two percent to net sales.  Unfavorable
        foreign exchange reduced net sales by six percent.  Baby Care volume
        increased low single digits behind new initiative launches in Western
        Europe including the expansion of Pampers Simply Dry and market growth
        in Asia and Western Europe.  Family Care volume was down mid-single
        digits due to lower shipments of Charmin primarily driven by trade
        inventory reductions and market share losses due to a shift in timing of
        merchandising activity.  Net earnings increased eight percent to $557
million due to price increases, lower commodity costs and manufacturing cost savings.

Fiscal Year 2010 Guidance

For fiscal year 2010, the Company increased the range of expected organic sales growth by one percent to plus two to four percent. Net sales are expected to be up three to six percent. Foreign exchange is expected to contribute one to two percent to net sales growth. The Company updated its diluted earnings per share guidance to $4.02 to $4.12 and core EPS of $3.47 to $3.59 by increasing the low end of the previous guidance ranges by $0.03/share. Core earnings per share are expected to be in line to up three percent versus year ago.

October - December 2009 Quarter Guidance

For the October - December quarter, the Company expects organic sales growth of two to five percent. Net sales are expected to increase three to seven percent versus the prior year. Foreign exchange is expected to add one to two percent to net sales growth. Diluted earnings per share are expected to be $1.36 to $1.44 including an estimated $0.43 gain on the sale of the global pharmaceuticals business. The final gain amount will be provided in January with the December quarter results. Core earnings per share are expected to be $0.91 to $1.00, an increase of one to 11 percent versus prior year which included very high commodity costs.

Global Pharmaceuticals Business Divestiture

The Company commented that it is on track to complete the sale of its global pharmaceuticals business to Warner Chilcott by the end of October 2009, as previously communicated. The estimated financial impacts of the transaction are unchanged versus prior guidance.

Forward-Looking Statements

All statements, other than statements of historical fact included in this release or presentation, 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 or presentation, 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 manage ongoing acquisition and divestiture activities to achieve the cost and growth synergies in accordance with the stated goals of these transactions without impacting the delivery of base business objectives; (3) the ability to successfully manage ongoing organizational changes designed to support our growth strategies, while successfully identifying, developing and retaining key employees; (4) the ability to manage and maintain key customer relationships; (5) the ability to maintain key manufacturing and supply sources (including sole supplier and plant manufacturing sources); (6) the ability to successfully manage regulatory, tax and legal requirements and matters (including product liability, patent, intellectual property, competition law matters, and tax policy), and to resolve pending matters within current estimates; (7) the ability to successfully implement, achieve and sustain cost improvement plans in manufacturing and overhead areas, including the Company's outsourcing projects; (8) the ability to successfully manage currency (including currency issues in certain countries, such as Venezuela, China and India), debt, interest rate and commodity cost exposures and significant credit or liquidity issues; (9) 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; (10) the ability to successfully manage competitive factors, including prices, promotional incentives and trade terms for products; (11) the ability to obtain patents and respond to technological advances attained by competitors and patents granted to competitors; (12) the ability to successfully manage increases in the prices of raw materials used to make the Company's products; (13) the ability to stay close to consumers in an era of increased media fragmentation; (14) the ability to stay on the leading edge of innovation and maintain a positive reputation on our brands; and (15) the ability to rely on and maintain key information technology systems. 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

Four 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®, Tide®, Ariel®, Always®, Whisper®, Pantene®, Mach3®, Bounty®, Dawn®, Gain®, Pringles®, Charmin®, Downy®, Lenor®, Iams®, Crest®, Oral-B®, Actonel®, Duracell®, Olay®, Head & Shoulders®, Wella®, Gillette®, Braun® and Fusion®. The P&G community includes approximately 135,000 employees working in about 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 for the July - September quarter is as

follows:

    Jul - Sep '09             Net       Foreign      Acquisition/ Organic
                             Sales      Exchange     Divestiture   Sales
                             Growth     Impact         Impact*    Growth
    Beauty                     -5%        7%              0%        2%
    Grooming                  -11%        9%              0%       -2%
    Health Care                -4%        8%              0%        4%
    Snacks and Pet Care        -6%        3%              0%       -3%
    Fabric Care and Home Care  -5%        7%              0%        2%
    Baby Care and Family Care  -5%        6%              0%        1%
    Total P&G                  -6%        7%              1%        2%

    *Acquisition/Divestiture Impact includes rounding impacts necessary to
    reconcile net sales to organic sales.

Core EPS: This is a measure of the Company's diluted net earnings per share from continuing operations excluding incremental restructuring charges incurred to offset the dilutive impact of the Folgers divestiture. We do not view these items to be part of our sustainable results. We believe the core EPS 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 from continuing operations to core earnings per share:

                                                 JAS 08            JAS 09

    Diluted Net Earnings Per Share                $1.03             $1.06
    Folgers Results of Operations                ($0.02)              -
    Gain on the Sale of Actonel in Japan              -            ($0.04)
    Pharmaceuticals Results of Operations        ($0.05)           ($0.05)
    Diluted Net Earnings Per Share -
     Continuing Operations                        $0.96             $0.97
    Incremental Folgers-related
     Restructuring Charges                        $0.01               -
    Core EPS                                      $0.97             $0.97
    Core EPS Growth                                                   0%


                                                 OND 08            OND 09

    Diluted Net Earnings Per Share                $1.58        $1.36 to $1.44
    Folgers Results of Operations and Gain
     on the Sale                                 ($0.64)              -
    Gain on the Sale of Pharmaceuticals               -            ($0.43)
    Pharmaceuticals Results of Operations        ($0.05)    ($0.02) to ($0.01)
    Diluted Net Earnings Per Share -
     Continuing Operations                        $0.89       $0.91 to $1.00
    Incremental Folgers-related Restructuring
     Charges                                      $0.01               -
    Core EPS                                      $0.90       $0.91 to $1.00
    Core EPS Growth                                              1% to 11%


                                                FY 2009           FY 2010

    Diluted Net Earnings Per Share                $4.26       $4.02 to $4.12
    Folgers Results of Operations and Gain
     on the Sale                                 ($0.68)              -
    Gain on the Sale of Pharmaceuticals               -           ($0.44)
    Gain on the Sale of Actonel in Japan              -           ($0.04)
    Pharmaceuticals Results of Operations        ($0.20)    ($0.07) to ($0.05)
    Corporate Restructuring Attributable
     to Pharmaceuticals                           $0.01               -
    Diluted Net Earnings Per Share -
     Continuing Operations                        $3.39       $3.47 to $3.59
    Incremental Folgers-related Restructuring
     Charges                                      $0.09               -
    Rounding Impacts                             ($0.01)              -
    Core EPS                                      $3.47       $3.47 to $3.59
    Core EPS Growth                                              0% to 3%

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. Given the size of the gains on the sale of Actonel in Japan and our global pharmaceuticals business to Warner Chilcott and our belief that they are not part of our sustainable business, we have excluded the gains from our calculation. We believe this provides a better perspective of our underlying liquidity trends. The reconciliation of free cash flow and free cash flow productivity is provided below (amounts in millions):

                    Operating    Capital   Free Cash    Net
                    Cash Flow    Spending     Flow    Earnings

    Jul - Sep 09      $4,555      ($552)    $4,003    $3,307


                                 Net Earnings
                      Actonel      Excluding    Free Cash Flow
                    Japan Gain    Actonel Gain   Productivity

    Jul - Sep 09       $121          $3,186          126%

Exhibit 2: Changes in the Global Business Unit Structure and Presentation of the Global Pharmaceuticals Business as Discontinued Operations

Fiscal Year 2010 Changes to Global Business Unit (GBU) Structure: Effective July 1, 2009, the Company implemented a number of changes to the organization structure of the Beauty GBU, which resulted in changes to the components of its reportable segment structure. Female blades and razors were formerly included in the Grooming reportable segment and are now included in the Beauty reportable segment. Certain male-focused brands and businesses, such as Old Spice and Gillette personal care, moved from the Beauty reportable segment to the Grooming reportable segment. In addition, the Beauty GBU was renamed the Beauty and Grooming GBU. The table below provides more information about the components of our GBU structure.

(Photo: http://www.newscom.com/cgi-bin/prnh/20091029/CL00917 )


                                                                  Billion
    GBU        Reportable   Key Product                           Dollar
               Segment      Categories      Key Products          Brands
    -------------------------------------------------------------------------
    Beauty     Beauty       Hair Care       Hair Colorants,       Head &
    and                                     Shampoos and          Shoulders,
    Grooming                                Conditioners          Pantene
                            -------------------------------------------------
                            Professional    Hair Colorants,       Wella
                            Salon           Shampoos and
                                            Conditioners
                            -------------------------------------------------
                            Female Beauty   Cosmetics,            Olay
                                            Deodorants,
                                            Female Blades
                                            and Razors,
                                            Personal Cleansing
                                            and Skin Care
                            -------------------------------------------------
                            Prestige        Fine Fragrances and
                                            Prestige Skin Care
                                            (SK-II)
               --------------------------------------------------------------
               Grooming     Male Grooming   Male Blades &         Fusion,
                                            Razors                Gillette,
                                            and Male Personal     Mach3
                                            Care Products
                                            (Deodorants, Face and
                                            Shave Products, Hair
                                            Care, Personal
                                            Cleansing)
                            -------------------------------------------------
                            Appliances      Electric Hair         Braun
                            (Braun)         Removal Devices
                                            and Home
                                            Appliances
    -------------------------------------------------------------------------
    Health     Health Care  Feminine Care   Feminine Pads and     Always
    and                                     Tampons
    Well-                   -------------------------------------------------
    Being                   Personal        Personal
                            Health          Diagnostics,
                            Care            Digestive
                                            and
                                            Respiratory
                                            Health
                                            Products
                            -------------------------------------------------
                            Oral Care       Oral Rinses,          Crest,
                                            Toothbrushes and      Oral-B
                                            Toothpastes
               --------------------------------------------------------------
               Snacks and   Pet Care        Wet and Dry Pet       Iams
               Pet Care                     Food
                            -------------------------------------------------
                            Snacks          Potato Crisps         Pringles
    -------------------------------------------------------------------------
    Household  Fabric Care  Fabric Care     Laundry Detergents    Ariel,
    Care       and Home                     and Fabric            Downy, Gain,
               Care                         Softeners             Tide
                            -------------------------------------------------
                            Home Care       Air and Fabric        Dawn
                                            Fresheners,
                                            Dishwashing
                                            Detergents, Hard
                                            Surface Cleaners
                            -------------------------------------------------
                            Batteries       Batteries and         Duracell
                                            Personal Power
                                            Devices
               --------------------------------------------------------------
               Baby Care    Baby Care       Baby Wipes and        Pampers
               and Family                   Diapers
               Care         -------------------------------------------------
                            Family Care     Bath Tissue,          Bounty,
                                            Facial Tissue         Charmin
                                            and Paper Towels
    -------------------------------------------------------------------------

Presentation of the Global Pharmaceuticals Business as Discontinued Operations: On August 24, 2009, the Company announced an agreement for the sale of its global pharmaceuticals business to Warner Chilcott which will be completed at a later date. The pharmaceuticals business has historically been part of the Health Care reportable segment. In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of the pharmaceuticals business are presented as discontinued operations and, as such, have been excluded from continuing operations and from segment results.

             THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
             (Amounts in Millions Except Per Share Amounts)
                    Consolidated Earnings Information

                                       JAS QUARTER

                              JAS 09   JAS 08     % CHG
    NET SALES                $19,807  $20,983        (6)%
     COST OF PRODUCTS SOLD     9,398   10,558       (11)%
    GROSS MARGIN              10,409   10,425        (0)%
     SELLING, GENERAL &
     ADMINISTRATIVE EXPENSE    5,961    6,039        (1)%
    OPERATING INCOME           4,448    4,386         1%
     TOTAL INTEREST EXPENSE      287      339
     OTHER NON-OPERATING
     INCOME, NET                  23      280
    EARNINGS FROM
     CONTINUING OPERATIONS
     BEFORE INCOME TAXES       4,184    4,327        (3)%
       INCOME TAXES            1,157    1,212

    NET EARNINGS FROM
     CONTINUING OPERATIONS     3,027    3,115        (3)%

    NET EARNINGS FROM
     DISCONTINUED OPERATIONS     280      233        20%

    NET EARNINGS               3,307    3,348        (1)%

    EFFECTIVE TAX RATE
     FROM CONTINUING
     OPERATIONS                 27.7%    28.0%


    PER COMMON SHARE:
     BASIC NET EARNINGS -
      CONTINUING OPERATIONS    $1.02    $1.02
     BASIC NET EARNINGS -
      DISCONTINUED OPERATIONS  $0.09    $0.08
     BASIC NET EARNINGS        $1.11    $1.10

     DILUTED NET EARNINGS -
      CONTINUING OPERATIONS    $0.97    $0.96         1%
     DILUTED NET EARNINGS  -
      DISCONTINUED OPERATIONS  $0.09    $0.07
     DILUTED NET EARNINGS      $1.06    $1.03         3%

     DIVIDENDS                 $0.44    $0.40        10%
    AVERAGE DILUTED
     SHARES OUTSTANDING      3,109.6  3,239.5



    COMPARISONS AS
     A % OF NET SALES                             Basis Pt Chg
     COST OF PRODUCTS SOLD      47.4%    50.3%        (290)
     GROSS MARGIN               52.6%    49.7%         290
     SELLING, GENERAL &
     ADMINISTRATIVE EXPENSE     30.1%    28.8%         130
     OPERATING MARGIN           22.5%    20.9%         160
     EARNINGS FROM
      CONTINUING OPERATIONS
      BEFORE INCOME TAXES       21.1%    20.6%          50
     NET EARNINGS FROM
      CONTINUING OPERATIONS     15.3%    14.8%          50


    Certain amounts for prior periods were reclassified to conform with the
    fiscal 2010 presentation



        THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
                    (Amounts in Millions)
             Consolidated Cash Flows Information

                                           Three Months
                                               Ended
                                            September 30
                                            2009    2008

    CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                  $4,781  $3,313

    OPERATING ACTIVITIES
        NET EARNINGS                       3,307   3,348
        DEPRECIATION AND
         AMORTIZATION                        771     810
        SHARE-BASED COMPENSATION EXPENSE      99     126
        DEFERRED INCOME TAXES                (29)    247
        GAIN ON SALE OF BUSINESSES          (199)   (317)
        CHANGES IN:
            ACCOUNTS RECEIVABLE             (513)   (725)
            INVENTORIES                      (96)   (833)
            ACCOUNTS PAYABLE, ACCRUED
             AND OTHER LIABILITIES           818     398
            OTHER OPERATING ASSETS
             & LIABILITIES                   398     384
        OTHER                                 (1)      6

      TOTAL OPERATING ACTIVITIES           4,555   3,444

    INVESTING ACTIVITIES
        CAPITAL EXPENDITURES                (552)   (699)
        PROCEEDS FROM ASSET SALES            209     545
        ACQUISITIONS, NET OF
         CASH ACQUIRED                       (19)   (292)
        CHANGE IN INVESTMENTS                (16)     34

      TOTAL INVESTING ACTIVITIES            (378)   (412)

    FINANCING ACTIVITIES
        DIVIDENDS TO SHAREHOLDERS         (1,336) (1,254)
        CHANGE IN SHORT-TERM DEBT          1,914   3,436
        ADDITIONS TO LONG-TERM DEBT        1,496     878
        REDUCTIONS OF LONG-TERM DEBT      (4,986) (1,287)
        TREASURY STOCK PURCHASES              (8) (3,911)
        IMPACT OF STOCK OPTIONS AND OTHER    117     405

      TOTAL FINANCING ACTIVITIES          (2,803) (1,733)

    EFFECT OF EXCHANGE RATE CHANGES
     ON CASH AND CASH EQUIVALENTS            139    (110)

    CHANGE IN CASH AND
     CASH EQUIVALENTS                      1,513   1,189

    CASH AND CASH EQUIVALENTS,
     END OF PERIOD                        $6,294  $4,502

    Certain amounts for prior periods were reclassified to conform with the
    fiscal 2010 presentation



             THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
                         (Amounts in Millions)
                 Consolidated Balance Sheet Information

                                   September 30, 2009    June 30, 2009

    CASH AND CASH EQUIVALENTS              $6,294            $4,781
    ACCOUNTS RECEIVABLE                     6,239             5,836
    TOTAL INVENTORIES                       7,050             6,880
    OTHER                                   3,945             4,408
    ASSETS HELD FOR SALE                      989                 -
    TOTAL CURRENT ASSETS                   24,517            21,905

    NET PROPERTY, PLANT
     AND EQUIPMENT                         19,591            19,462
    NET GOODWILL AND OTHER
     INTANGIBLE ASSETS                     89,697            89,118
    OTHER NON-CURRENT ASSETS                4,576             4,348

    TOTAL ASSETS                         $138,381          $134,833


    ACCOUNTS PAYABLE                       $5,581            $5,980
    ACCRUED AND
     OTHER LIABILITIES                      9,610             8,601
    DEBT DUE WITHIN ONE YEAR               12,957            16,320
    LIABILITIES HELD FOR SALE                 526                 -
    TOTAL CURRENT LIABILITIES              28,674            30,901

    LONG-TERM DEBT                         22,439            20,652
    OTHER                                  20,241            19,898
    TOTAL LIABILITIES                      71,354            71,451

    TOTAL SHAREHOLDERS' EQUITY             67,027            63,382

    TOTAL LIABILITIES &
     SHAREHOLDERS' EQUITY                $138,381          $134,833

    Certain amounts for prior periods were reclassified to conform with the
    fiscal 2010 presentation



                  THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
                             (Amounts in Millions)
                      Consolidated Earnings Information

                              Three Months Ended September 30, 2009

                                          Earnings
                                            From
                                         Continuing    %       Net        %
                                         Operations  Change Earnings   Change
                               % Change    Before    Versus   From     Versus
                                 Versus    Income    Year   Continuing  Year
                     Net Sales  Year Ago   Taxes      Ago   Operations   Ago

    Beauty and
     Grooming GBU
       Beauty          $4,921       -5%   $  1,027     1%   $ 777       -1%
       Grooming         1,858      -11%        489   -20%     351      -21%

    Health and Well-
     Being GBU
       Health Care      2,979       -4%        830    10%     550        9%
       Snacks and
        Pet Care          755       -6%        113    26%      74       35%

    Household
     Care GBU
       Fabric Care and
        Home Care       6,130       -5%      1,510    20%   1,009       22%
       Baby Care and
        Family Care     3,589       -5%        885    10%     557        8%

    Total Business
     Segments          20,232       -6%      4,854     7%   3,318        6%
    Corporate            (425)     N/A        (670)  N/A     (291)     N/A
    Total Company      19,807       -6%      4,184    -3%   3,027       -3%



                       JULY - SEPTEMBER NET SALES INFORMATION
                          (Percent Change vs. Year Ago) *

                       Volume   Volume
                       With     Without
                       Acquisi- Acquisi-
                        tions/   tions/                                Net
                       Divesti- Divesti-  Foreign            Mix/     Sales
                        tures    tures    Exchange   Price   Other   Growth
    Beauty and
     Grooming GBU
        Beauty            -2%      -1%      -7%        3%      1%      -5%
        Grooming          -8%      -8%      -9%        6%      0%     -11%

    Health and
     Well-Being GBU
        Health Care        0%       0%      -8%        3%      1%      -4%
        Snacks and Pet
         Care            -10%     -10%      -3%        6%      1%      -6%

    Household Care GBU
        Fabric Care and
         Home Care        -2%      -2%      -7%        3%      1%      -5%
        Baby Care and
         Family Care      -1%      -1%      -6%        2%      0%      -5%

    Total Company         -3%      -2%      -7%        3%      1%      -6%


    * These sales percentage changes are approximations based on quantitative
      formulas that are consistently applied.

SOURCE Procter & Gamble

Media, Paul Fox, +1-513-983-3465, or Jennifer Chelune, +1-513-983-2570; Investor Relations, Mark Erceg, +1-513-983-2414, or John Chevalier, +1-513-983-9974

 

Posted: October 2009


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