FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Ohio
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1-434
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31-0411980
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(State of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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One Procter & Gamble Plaza, Cincinnati, Ohio
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45202
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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þ
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if smaller reporting company)
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||||
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Item 1.
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Financial Statements
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|
Three Months Ended March 31
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|
Nine Months Ended March 31
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||||||||||||
Amounts in millions except per share amounts
|
2017
|
|
2016
|
|
2017
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|
2016
|
||||||||
NET SALES
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$
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15,605
|
|
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$
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15,755
|
|
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$
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48,979
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|
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$
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49,197
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Cost of products sold
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7,836
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7,915
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24,236
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24,527
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||||
Selling, general and administrative expense
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4,409
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4,522
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13,737
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13,731
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||||
OPERATING INCOME
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3,360
|
|
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3,318
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|
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11,006
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10,939
|
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||||
Interest expense
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96
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|
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146
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|
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349
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|
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429
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||||
Interest income
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46
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|
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33
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|
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123
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|
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135
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||||
Other non-operating income/(loss), net
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26
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21
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(450
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)
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38
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||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
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3,336
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3,226
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10,330
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10,683
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||||
Income taxes on continuing operations
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780
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|
889
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2,338
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2,664
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||||
NET EARNINGS FROM CONTINUING OPERATIONS
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2,556
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2,337
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7,992
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8,019
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||||
NET EARNINGS FROM DISCONTINUED OPERATIONS
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—
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|
446
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5,217
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627
|
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||||
NET EARNINGS
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2,556
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|
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2,783
|
|
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13,209
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|
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8,646
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||||
Less: Net earnings attributable to noncontrolling interests
|
34
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|
|
33
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|
|
98
|
|
|
89
|
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||||
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE
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$
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2,522
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$
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2,750
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|
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$
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13,111
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|
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$
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8,557
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|
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||||||||
BASIC NET EARNINGS PER COMMON SHARE:
(1)
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|
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||||||||
Earnings from continuing operations
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$
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0.96
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$
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0.83
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$
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2.95
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$
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2.86
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Earnings from discontinued operations
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—
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0.17
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2.00
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0.23
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||||
BASIC NET EARNINGS PER COMMON SHARE
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0.96
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1.00
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4.95
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3.09
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||||
DILUTED NET EARNINGS PER COMMON SHARE:
(1)
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|
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||||||||
Earnings from continuing operations
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$
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0.93
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$
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0.81
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$
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2.87
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$
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2.78
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Earnings from discontinued operations
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—
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0.16
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1.89
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0.22
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||||
DILUTED NET EARNINGS PER COMMON SHARE
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0.93
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0.97
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4.76
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3.00
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||||
DIVIDENDS PER COMMON SHARE
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$
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0.6695
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$
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0.6630
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$
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2.0085
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$
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1.9890
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Diluted weighted average common shares outstanding
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2,705.5
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2,835.0
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2,755.4
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2,855.6
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(1)
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Basic net earnings per share and Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.
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Three Months Ended March 31
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Nine Months Ended March 31
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||||||||||||
Amounts in millions
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2017
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2016
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2017
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2016
|
||||||||
NET EARNINGS
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$
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2,556
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$
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2,783
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$
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13,209
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$
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8,646
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OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX
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|
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||||||||
Financial statement translation
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726
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1,041
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(1,263
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)
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(937
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)
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||||
Unrealized gains/(losses) on hedges
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(192
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)
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(382
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)
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557
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(172
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)
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||||
Unrealized gains/(losses) on investment securities
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4
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36
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(64
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)
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16
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||||
Unrealized gains/(losses) on defined benefit retirement plans
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29
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(3
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)
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722
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231
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||||
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX
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567
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|
692
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(48
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)
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(862
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)
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||||
TOTAL COMPREHENSIVE INCOME/(LOSS)
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3,123
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3,475
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13,161
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7,784
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||||
Less: Total comprehensive income attributable to noncontrolling interests
|
34
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33
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98
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|
89
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||||
TOTAL COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO PROCTER & GAMBLE
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$
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3,089
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$
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3,442
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$
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13,063
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$
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7,695
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Amounts in millions
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March 31, 2017
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June 30, 2016
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|||||
Assets
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|||||
CURRENT ASSETS
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|||||
Cash and cash equivalents
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$
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5,817
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$
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7,102
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Available-for-sale investment securities
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8,510
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6,246
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|||
Accounts receivable
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4,358
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4,373
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|||
INVENTORIES
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|
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|||||
Materials and supplies
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1,324
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1,188
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|||
Work in process
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|
505
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563
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|||
Finished goods
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2,925
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2,965
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|||
Total inventories
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|
4,754
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|
|
4,716
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|||
Deferred income taxes
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|
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—
|
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1,507
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|
|||
Prepaid expenses and other current assets
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2,446
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|
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2,653
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|||
Current assets held for sale
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|
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—
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7,185
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|
|||
TOTAL CURRENT ASSETS
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25,885
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|
|
33,782
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|||
PROPERTY, PLANT AND EQUIPMENT, NET
|
|
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19,219
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19,385
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|||
GOODWILL
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43,682
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44,350
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|||
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET
|
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|
24,153
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24,527
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|
||||
OTHER NONCURRENT ASSETS
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|
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|
|
5,152
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|
|
5,092
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|
|||
TOTAL ASSETS
|
|
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|
|
$
|
118,091
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|
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$
|
127,136
|
|
|
|
|
|
|
|
|
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|
|||||
Liabilities and Shareholders' Equity
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|
|
|
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|
|||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|||||
Accounts payable
|
|
|
|
|
$
|
8,076
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|
|
$
|
9,325
|
|
|
Accrued and other liabilities
|
|
|
|
|
7,225
|
|
|
7,449
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|
|||
Current liabilities held for sale
|
|
|
|
|
—
|
|
|
2,343
|
|
|||
Debt due within one year
|
|
|
|
|
13,781
|
|
|
11,653
|
|
|||
TOTAL CURRENT LIABILITIES
|
|
|
|
|
29,082
|
|
|
30,770
|
|
|||
LONG-TERM DEBT
|
|
|
|
|
16,633
|
|
|
18,945
|
|
|||
DEFERRED INCOME TAXES
|
|
|
|
|
8,644
|
|
|
9,113
|
|
|||
OTHER NONCURRENT LIABILITIES
|
|
|
|
|
9,184
|
|
|
10,325
|
|
|||
TOTAL LIABILITIES
|
|
|
|
|
63,543
|
|
|
69,153
|
|
|||
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|||||
Preferred stock
|
|
|
|
|
1,010
|
|
|
1,038
|
|
|||
Common stock – shares issued –
|
March 2017
|
|
4,009.2
|
|
|
|
|
|
||||
|
June 2016
|
|
4,009.2
|
|
|
4,009
|
|
|
4,009
|
|
||
Additional paid-in capital
|
|
|
|
|
63,513
|
|
|
63,714
|
|
|||
Reserve for ESOP debt retirement
|
|
|
|
|
(1,248
|
)
|
|
(1,290
|
)
|
|||
Accumulated other comprehensive income/(loss)
|
|
|
|
|
(15,955
|
)
|
|
(15,907
|
)
|
|||
Treasury stock
|
|
|
|
|
(93,225
|
)
|
|
(82,176
|
)
|
|||
Retained earnings
|
|
|
|
|
95,736
|
|
|
87,953
|
|
|||
Noncontrolling interest
|
|
|
|
|
708
|
|
|
642
|
|
|||
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
|
|
54,548
|
|
|
57,983
|
|
|||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
$
|
118,091
|
|
|
$
|
127,136
|
|
|
Nine Months Ended March 31
|
||||||
Amounts in millions
|
2017
|
|
2016
|
||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
$
|
7,102
|
|
|
$
|
6,836
|
|
OPERATING ACTIVITIES
|
|
|
|
||||
Net earnings
|
13,209
|
|
|
8,646
|
|
||
Depreciation and amortization
|
2,100
|
|
|
2,239
|
|
||
Loss on early extinguishment of debt
|
543
|
|
|
—
|
|
||
Share-based compensation expense
|
197
|
|
|
216
|
|
||
Deferred income taxes
|
(382
|
)
|
|
(428
|
)
|
||
Loss/(gain) on sale of assets
|
(5,452
|
)
|
|
241
|
|
||
Goodwill and intangible asset impairment charges
|
—
|
|
|
450
|
|
||
Changes in:
|
|
|
|
||||
Accounts receivable
|
(159
|
)
|
|
(129
|
)
|
||
Inventories
|
(145
|
)
|
|
(94
|
)
|
||
Accounts payable, accrued and other liabilities
|
(1,113
|
)
|
|
(199
|
)
|
||
Other operating assets and liabilities
|
219
|
|
|
167
|
|
||
Other
|
48
|
|
|
187
|
|
||
TOTAL OPERATING ACTIVITIES
|
9,065
|
|
|
11,296
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(2,230
|
)
|
|
(2,023
|
)
|
||
Proceeds from asset sales
|
411
|
|
|
114
|
|
||
Acquisitions, net of cash acquired
|
(16
|
)
|
|
(186
|
)
|
||
Purchases of short-term investments
|
(3,369
|
)
|
|
(2,372
|
)
|
||
Proceeds from sales and maturities of short-term investments
|
834
|
|
|
1,222
|
|
||
Pre-divestiture addition of restricted cash related to the Beauty Brands divestiture
|
(874
|
)
|
|
(995
|
)
|
||
Cash transferred at closing related to the Beauty Brands divestiture
|
(475
|
)
|
|
—
|
|
||
Release of restricted cash upon closing of the Beauty Brands divestiture
|
1,870
|
|
|
—
|
|
||
Cash transferred in Batteries divestiture
|
—
|
|
|
(143
|
)
|
||
Change in other investments
|
26
|
|
|
—
|
|
||
TOTAL INVESTING ACTIVITIES
|
(3,823
|
)
|
|
(4,383
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Dividends to shareholders
|
(5,410
|
)
|
|
(5,589
|
)
|
||
Change in short-term debt
|
3,556
|
|
|
1,535
|
|
||
Additions to long-term debt
|
2,641
|
|
|
3,916
|
|
||
Reductions of long-term debt
|
(5,020
|
)
|
(1)
|
(2,210
|
)
|
||
Treasury stock purchases
|
(4,504
|
)
|
|
(3,504
|
)
|
||
Shares exchanged in Batteries divestiture
|
—
|
|
|
(1,730
|
)
|
||
Impact of stock options and other
|
2,398
|
|
|
2,024
|
|
||
TOTAL FINANCING ACTIVITIES
|
(6,339
|
)
|
|
(5,558
|
)
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
(188
|
)
|
|
(296
|
)
|
||
CHANGE IN CASH AND CASH EQUIVALENTS
|
(1,285
|
)
|
|
1,059
|
|
||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
5,817
|
|
|
$
|
7,895
|
|
(1)
|
Includes
$543
of costs related to early extinguishment of debt.
|
|
|
|
Three Months Ended March 31
|
|
Nine Months Ended March 31
|
||||||||||||||||||||
|
|
|
Net Sales
|
|
Earnings/(Loss) from Continuing Operations Before Income Taxes
|
|
Net Earnings/(Loss) from Continuing Operations
|
|
Net Sales
|
|
Earnings/(Loss) from Continuing Operations Before Income Taxes
|
|
Net Earnings/(Loss) from Continuing Operations
|
||||||||||||
Beauty
|
2017
|
|
$
|
2,675
|
|
|
$
|
531
|
|
|
$
|
396
|
|
|
$
|
8,613
|
|
|
$
|
2,028
|
|
|
$
|
1,528
|
|
|
2016
|
|
2,719
|
|
|
604
|
|
|
458
|
|
|
8,723
|
|
|
2,200
|
|
|
1,667
|
|
||||||
Grooming
|
2017
|
|
1,525
|
|
|
437
|
|
|
333
|
|
|
4,972
|
|
|
1,580
|
|
|
1,217
|
|
||||||
|
2016
|
|
1,623
|
|
|
469
|
|
|
356
|
|
|
5,103
|
|
|
1,547
|
|
|
1,187
|
|
||||||
Health Care
|
2017
|
|
1,841
|
|
|
470
|
|
|
310
|
|
|
5,774
|
|
|
1,574
|
|
|
1,052
|
|
||||||
|
2016
|
|
1,773
|
|
|
414
|
|
|
278
|
|
|
5,547
|
|
|
1,426
|
|
|
990
|
|
||||||
Fabric & Home Care
|
2017
|
|
4,957
|
|
|
972
|
|
|
599
|
|
|
15,529
|
|
|
3,226
|
|
|
2,052
|
|
||||||
|
2016
|
|
5,028
|
|
|
1,014
|
|
|
652
|
|
|
15,626
|
|
|
3,311
|
|
|
2,172
|
|
||||||
Baby, Feminine & Family Care
|
2017
|
|
4,471
|
|
|
890
|
|
|
555
|
|
|
13,711
|
|
|
2,973
|
|
|
1,932
|
|
||||||
|
2016
|
|
4,506
|
|
|
976
|
|
|
631
|
|
|
13,874
|
|
|
3,124
|
|
|
2,063
|
|
||||||
Corporate
|
2017
|
|
136
|
|
|
36
|
|
|
363
|
|
|
380
|
|
|
(1,051
|
)
|
|
211
|
|
||||||
|
2016
|
|
106
|
|
|
(251
|
)
|
|
(38
|
)
|
|
324
|
|
|
(925
|
)
|
|
(60
|
)
|
||||||
Total Company
|
2017
|
|
$
|
15,605
|
|
|
$
|
3,336
|
|
|
$
|
2,556
|
|
|
$
|
48,979
|
|
|
$
|
10,330
|
|
|
$
|
7,992
|
|
|
2016
|
|
15,755
|
|
|
3,226
|
|
|
2,337
|
|
|
49,197
|
|
|
10,683
|
|
|
8,019
|
|
|
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
|
(227
|
)
|
|
(259
|
)
|
|
(74
|
)
|
|
(24
|
)
|
|
(71
|
)
|
|
(655
|
)
|
||||||
Goodwill at March 31, 2017
|
$
|
12,418
|
|
|
$
|
19,218
|
|
|
$
|
5,756
|
|
|
$
|
1,829
|
|
|
$
|
4,461
|
|
|
$
|
43,682
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||
Intangible assets with determinable lives
|
$
|
7,310
|
|
|
$
|
(4,757
|
)
|
Intangible assets with indefinite lives
|
21,600
|
|
|
—
|
|
||
Total identifiable intangible assets
|
$
|
28,910
|
|
|
$
|
(4,757
|
)
|
|
Three Months Ended March 31, 2017
|
|
Three Months Ended March 31, 2016
|
||||||||||||||||
CONSOLIDATED AMOUNTS
|
Continuing Operations
|
Discontinued Operations
|
Total
|
|
Continuing Operations
|
Discontinued Operations
|
Total
|
||||||||||||
Net earnings
|
$
|
2,556
|
|
$
|
—
|
|
$
|
2,556
|
|
|
$
|
2,337
|
|
$
|
446
|
|
$
|
2,783
|
|
Net earnings attributable to noncontrolling interests
|
(34
|
)
|
—
|
|
(34
|
)
|
|
(32
|
)
|
(1
|
)
|
(33
|
)
|
||||||
Net earnings attributable to P&G (Diluted)
|
2,522
|
|
—
|
|
2,522
|
|
|
2,305
|
|
445
|
|
2,750
|
|
||||||
Preferred dividends, net of tax benefit
|
(60
|
)
|
—
|
|
(60
|
)
|
|
(63
|
)
|
—
|
|
(63
|
)
|
||||||
Net earnings attributable to P&G available to common shareholders (Basic)
|
$
|
2,462
|
|
$
|
—
|
|
$
|
2,462
|
|
|
$
|
2,242
|
|
$
|
445
|
|
$
|
2,687
|
|
|
|
|
|
|
|
|
|
||||||||||||
SHARES IN MILLIONS
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average common shares outstanding
|
2,563.3
|
|
2,563.3
|
|
2,563.3
|
|
|
2,688.7
|
|
2,688.7
|
|
2,688.7
|
|
||||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||||||||
Conversion of preferred shares
(1)
|
98.7
|
|
98.7
|
|
98.7
|
|
|
103.4
|
|
103.4
|
|
103.4
|
|
||||||
Exercise of stock options and other unvested equity awards
(2)
|
43.5
|
|
43.5
|
|
43.5
|
|
|
42.9
|
|
42.9
|
|
42.9
|
|
||||||
Diluted weighted average common shares outstanding
|
2,705.5
|
|
2,705.5
|
|
2,705.5
|
|
|
2,835.0
|
|
2,835.0
|
|
2,835.0
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
PER SHARE AMOUNTS
(3)
|
|
|
|
|
|
|
|
||||||||||||
Basic net earnings per common share
|
$
|
0.96
|
|
$
|
—
|
|
$
|
0.96
|
|
|
$
|
0.83
|
|
$
|
0.17
|
|
$
|
1.00
|
|
Diluted net earnings per common share
|
$
|
0.93
|
|
$
|
—
|
|
$
|
0.93
|
|
|
$
|
0.81
|
|
$
|
0.16
|
|
$
|
0.97
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Nine Months Ended March 31, 2017
|
|
Nine Months Ended March 31, 2016
|
||||||||||||||||
CONSOLIDATED AMOUNTS
|
Continuing Operations
|
Discontinued Operations
|
Total
|
|
Continuing Operations
|
Discontinued Operations
|
Total
|
||||||||||||
Net earnings
|
$
|
7,992
|
|
$
|
5,217
|
|
$
|
13,209
|
|
|
$
|
8,019
|
|
$
|
627
|
|
$
|
8,646
|
|
Net earnings attributable to noncontrolling interests
|
(98
|
)
|
—
|
|
(98
|
)
|
|
(88
|
)
|
(1
|
)
|
(89
|
)
|
||||||
Net earnings attributable to P&G (Diluted)
|
7,894
|
|
5,217
|
|
13,111
|
|
|
7,931
|
|
626
|
|
8,557
|
|
||||||
Preferred dividends, net of tax benefit
|
(184
|
)
|
—
|
|
(184
|
)
|
|
(192
|
)
|
—
|
|
(192
|
)
|
||||||
Net earnings attributable to P&G available to common shareholders (Basic)
|
$
|
7,710
|
|
$
|
5,217
|
|
$
|
12,927
|
|
|
$
|
7,739
|
|
$
|
626
|
|
$
|
8,365
|
|
|
|
|
|
|
|
|
|
||||||||||||
SHARES IN MILLIONS
|
|
|
|
|
|
|
|
||||||||||||
Basic weighted average common shares outstanding
|
2,611.5
|
|
2,611.5
|
|
2,611.5
|
|
|
2,709.2
|
|
2,709.2
|
|
2,709.2
|
|
||||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||||||||
Conversion of preferred shares
(1)
|
99.9
|
|
99.9
|
|
99.9
|
|
|
104.6
|
|
104.6
|
|
104.6
|
|
||||||
Exercise of stock options and other unvested equity awards
(2)
|
44.0
|
|
44.0
|
|
44.0
|
|
|
41.8
|
|
41.8
|
|
41.8
|
|
||||||
Diluted weighted average common shares outstanding
|
2,755.4
|
|
2,755.4
|
|
2,755.4
|
|
|
2,855.6
|
|
2,855.6
|
|
2,855.6
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
PER SHARE AMOUNTS
(3)
|
|
|
|
|
|
|
|
||||||||||||
Basic net earnings per common share
|
$
|
2.95
|
|
$
|
2.00
|
|
$
|
4.95
|
|
|
$
|
2.86
|
|
$
|
0.23
|
|
$
|
3.09
|
|
Diluted net earnings per common share
|
$
|
2.87
|
|
$
|
1.89
|
|
$
|
4.76
|
|
|
$
|
2.78
|
|
$
|
0.22
|
|
$
|
3.00
|
|
(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)
|
Weighted average outstanding stock options of approximately
7 million
and
33 million
for the three months ended
March 31, 2017
and
2016
, respectively, and approximately
16 million
and
51 million
for the
nine
months ended
March 31, 2017
and
2016
, 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 attributable to Procter & Gamble.
|
|
Three Months Ended March 31
|
|
Nine Months Ended March 31
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Share-based compensation expense
|
$
|
93
|
|
|
$
|
79
|
|
|
$
|
211
|
|
|
$
|
220
|
|
Net periodic benefit cost for pension benefits
(1)
|
77
|
|
|
85
|
|
|
430
|
|
|
256
|
|
||||
Net periodic benefit cost/(credit) for other retiree benefits
(1)
|
(23
|
)
|
|
(26
|
)
|
|
16
|
|
|
(75
|
)
|
(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
|
||||||
|
March 31, 2017
|
|
June 30, 2016
|
||||
Investments
|
|
|
|
||||
U.S. government securities
|
$
|
5,795
|
|
|
$
|
4,839
|
|
Corporate bond securities
|
2,715
|
|
|
1,407
|
|
||
Other investments
|
97
|
|
|
28
|
|
||
Total
|
$
|
8,607
|
|
|
$
|
6,274
|
|
|
Notional Amount
|
|
Fair Value Asset/(Liability)
|
||||||||||||
|
March 31, 2017
|
|
June 30, 2016
|
|
March 31, 2017
|
|
June 30, 2016
|
||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
798
|
|
|
$
|
798
|
|
|
$
|
90
|
|
|
$
|
31
|
|
Derivatives in Fair Value Hedging Relationships
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
4,418
|
|
|
$
|
4,993
|
|
|
$
|
169
|
|
|
$
|
371
|
|
Derivatives in Net Investment Hedging Relationships
|
|
|
|
|
|
|
|
||||||||
Net investment hedges
|
$
|
2,902
|
|
|
$
|
3,013
|
|
|
$
|
90
|
|
|
$
|
(87
|
)
|
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
4,845
|
|
|
$
|
6,482
|
|
|
$
|
51
|
|
|
$
|
(10
|
)
|
|
Amount of Gain/(Loss) Recognized in AOCI on Derivatives (Effective Portion)
|
||||||
|
March 31, 2017
|
|
June 30, 2016
|
||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
||||
Interest rate contracts
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Foreign currency contracts
|
(4
|
)
|
|
—
|
|
||
Total
|
$
|
(6
|
)
|
|
$
|
(2
|
)
|
Derivatives in Net Investment Hedging Relationships
|
|
|
|
||||
Net investment hedges
|
$
|
54
|
|
|
$
|
(53
|
)
|
|
Amount of Gain/(Loss) Reclassified from AOCI into Earnings
|
||||||||||||||
|
Three Months Ended March 31
|
|
Nine Months Ended March 31
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Derivatives in Cash Flow Hedging Relationships
(1)
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Foreign currency contracts
|
(25
|
)
|
|
(43
|
)
|
|
74
|
|
|
(44
|
)
|
||||
Total
|
$
|
(25
|
)
|
|
$
|
(43
|
)
|
|
$
|
74
|
|
|
$
|
(41
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
Amount of Gain/(Loss) Recognized in Earnings
|
||||||||||||||
|
Three Months Ended March 31
|
|
Nine Months Ended March 31
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Derivatives in Fair Value Hedging Relationships
(2)
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
(22
|
)
|
|
$
|
132
|
|
|
$
|
(202
|
)
|
|
$
|
171
|
|
Debt
|
22
|
|
|
(132
|
)
|
|
202
|
|
|
(171
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives in Net Investment Hedging Relationships
(2)
|
|
|
|
|
|
|
|
||||||||
Net investment hedges
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
Derivatives Not Designated as Hedging Instruments
(3)
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
155
|
|
|
$
|
191
|
|
|
$
|
(29
|
)
|
|
$
|
(29
|
)
|
(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)
|
631
|
|
|
(56
|
)
|
|
338
|
|
|
(1,146
|
)
|
|
(233
|
)
|
|||||
Amounts reclassified from AOCI
(2) (3) (4)
|
(74
|
)
|
|
(8
|
)
|
|
384
|
|
|
(117
|
)
|
|
185
|
|
|||||
Net current period OCI
|
557
|
|
|
(64
|
)
|
|
722
|
|
|
(1,263
|
)
|
|
(48
|
)
|
|||||
Balance at March 31, 2017
|
$
|
(2,084
|
)
|
|
$
|
(30
|
)
|
|
$
|
(5,076
|
)
|
|
$
|
(8,765
|
)
|
|
$
|
(15,955
|
)
|
(1)
|
Net of tax expense/(benefit) of
$337
,
$(6)
and
$91
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
$151
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.
|
(4)
|
Amounts reclassified from AOCI for financial statement translation relate to accumulated translation associated with foreign entities sold as part of the sale of the Beauty Brands business. These amounts were reclassified into Net earnings from discontinued operations in the Consolidated Statement of Earnings.
|
|
|
|
|
|
|
|
Nine Months Ended March 31, 2017
|
|
|
||||||||||||||
|
Accrual Balance June 30, 2016
|
|
Charges Previously Reported (Six Months Ended December 31, 2016)
|
|
Charges for the Three Months Ended March 31, 2017
|
|
Cash Spent
(1)
|
|
Charges Against Assets
|
|
Accrual Balance March 31, 2017
|
||||||||||||
Separations
|
$
|
243
|
|
|
$
|
96
|
|
|
$
|
43
|
|
|
$
|
(182
|
)
|
|
$
|
—
|
|
|
$
|
200
|
|
Asset-related costs
|
—
|
|
|
206
|
|
|
80
|
|
|
—
|
|
|
(286
|
)
|
|
—
|
|
||||||
Other costs
|
72
|
|
|
46
|
|
|
34
|
|
|
(104
|
)
|
|
—
|
|
|
48
|
|
||||||
Total
|
$
|
315
|
|
|
$
|
348
|
|
|
$
|
157
|
|
|
$
|
(286
|
)
|
|
$
|
(286
|
)
|
|
$
|
248
|
|
(1)
|
Includes liabilities transferred to Coty related to our Beauty Brands divestiture.
|
|
Three Months Ended March 31, 2017
|
|
Nine Months Ended March 31, 2017
|
||||
Beauty
|
$
|
23
|
|
|
$
|
63
|
|
Grooming
|
14
|
|
|
31
|
|
||
Health Care
|
1
|
|
|
9
|
|
||
Fabric & Home Care
|
26
|
|
|
103
|
|
||
Baby, Feminine & Family Care
|
41
|
|
|
141
|
|
||
Corporate
(1)
|
52
|
|
|
158
|
|
||
Total Company
|
$
|
157
|
|
|
$
|
505
|
|
(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 March 31
|
|
Nine Months Ended March 31
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Beauty Brands
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
5,217
|
|
|
$
|
386
|
|
Batteries
|
—
|
|
|
448
|
|
|
—
|
|
|
241
|
|
||||
Net earnings/(loss) from discontinued operations
|
$
|
—
|
|
|
$
|
446
|
|
|
$
|
5,217
|
|
|
$
|
627
|
|
|
Beauty Brands
|
||||||||||||||
|
Three Months Ended March 31
|
|
Nine Months Ended March 31
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,092
|
|
|
$
|
1,159
|
|
|
$
|
3,715
|
|
Cost of products sold
|
—
|
|
|
365
|
|
|
450
|
|
|
1,193
|
|
||||
Selling, general and administrative expense
|
—
|
|
|
672
|
|
|
783
|
|
|
1,983
|
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||
Intangible asset impairment charges
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
||||
Other non-operating income/(loss), net
|
—
|
|
|
(6
|
)
|
|
16
|
|
|
(8
|
)
|
||||
Earnings/(loss) from discontinued operations before income taxes
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(72
|
)
|
|
$
|
483
|
|
Income taxes on discontinued operations
|
—
|
|
|
3
|
|
|
46
|
|
|
97
|
|
||||
Gain on sale of business before income taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,197
|
|
|
$
|
—
|
|
Income tax expense/(benefit) on sale of business
|
—
|
|
|
—
|
|
|
(138
|
)
|
(1)
|
—
|
|
||||
Net earnings/(loss) from discontinued operations
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
5,217
|
|
|
$
|
386
|
|
(1)
|
The income tax benefit of the Beauty Brands divestiture represents the reversal of underlying deferred tax balances partially offset by current tax expense related to the transaction.
|
|
Beauty Brands
|
||||||
|
Nine Months Ended March 31
|
||||||
|
2017
|
|
2016
|
||||
NON-CASH OPERATING ITEMS
|
|
|
|
||||
Depreciation and amortization
|
$
|
24
|
|
|
$
|
78
|
|
Deferred income tax benefit
|
(649
|
)
|
|
—
|
|
||
Before tax gain on sale of business
|
5,210
|
|
|
—
|
|
||
Goodwill and intangible asset impairment charges
|
$
|
—
|
|
|
$
|
48
|
|
Net increase in accrued taxes
|
307
|
|
|
—
|
|
||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Cash taxes paid
|
$
|
204
|
|
|
$
|
—
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
$
|
38
|
|
|
$
|
65
|
|
|
Beauty Brands
|
||
|
June 30, 2016
|
||
Cash
|
$
|
40
|
|
Restricted cash
|
996
|
|
|
Accounts receivable
|
384
|
|
|
Inventories
|
494
|
|
|
Prepaid expenses and other current assets
|
126
|
|
|
Property, plant and equipment, net
|
629
|
|
|
Goodwill and intangible assets, net
|
4,411
|
|
|
Other noncurrent assets
|
105
|
|
|
Current assets held for sale
|
$
|
7,185
|
|
|
|
||
Accounts payable
|
$
|
148
|
|
Accrued and other liabilities
|
384
|
|
|
Noncurrent deferred tax liabilities
|
370
|
|
|
Long-term debt
|
996
|
|
|
Other noncurrent liabilities
|
445
|
|
|
Current liabilities held for sale
|
$
|
2,343
|
|
|
Batteries
|
||||||
|
Three Months Ended March 31, 2016
|
|
Nine Months Ended March 31, 2016
|
||||
Net sales
|
$
|
320
|
|
|
$
|
1,517
|
|
Earnings before impairment charges and income taxes
|
35
|
|
|
266
|
|
||
Impairment charges
|
—
|
|
|
(402
|
)
|
||
Income tax (expense)/benefit
|
(9
|
)
|
|
(45
|
)
|
||
Gain on sale before income taxes
|
(288
|
)
|
|
(288
|
)
|
||
Income tax expense on sale
(1)
|
710
|
|
|
710
|
|
||
Net earnings/(loss) from discontinued operations
|
$
|
448
|
|
|
$
|
241
|
|
(1)
|
The income tax benefit of the Batteries divestiture primarily represents the reversal of underlying deferred tax balances.
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Overview
|
•
|
Summary of Results –
Nine
Months Ended
March 31, 2017
|
•
|
Economic Conditions and Uncertainties
|
•
|
Results of Operations – Three and
Nine
Months Ended
March 31, 2017
|
•
|
Business Segment Discussion – Three and
Nine
Months Ended
March 31, 2017
|
•
|
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 March 31
|
|
Nine Months Ended March 31
|
||||
|
Net Sales
|
|
Net Earnings
|
|
Net Sales
|
|
Net Earnings
|
Beauty
|
17%
|
|
18%
|
|
18%
|
|
20%
|
Grooming
|
10%
|
|
15%
|
|
10%
|
|
16%
|
Health Care
|
12%
|
|
14%
|
|
12%
|
|
13%
|
Fabric & Home Care
|
32%
|
|
28%
|
|
32%
|
|
26%
|
Baby, Feminine & Family Care
|
29%
|
|
25%
|
|
28%
|
|
25%
|
Total Company
|
100%
|
|
100%
|
|
100%
|
|
100%
|
•
|
Net sales
were unchanged versus the previous period at
$49.0 billion
. Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange,
increased 2%
. Organic sales increased
2%
in Beauty,
7%
in Health Care,
2%
in Fabric & Home Care,
1%
in Baby, Feminine & Family Care and were unchanged in Grooming.
|
•
|
Unit volume
increased 1%
with organic volume
up 2%
. Volume increased mid-single digits in Health Care and low single digits in Fabric & Home Care, Baby, Feminine & Family Care and Grooming. Volume decreased low single digits in Beauty. Excluding the impacts of minor brand divestitures, organic volume increased low single digits in Beauty.
|
•
|
Net earnings from continuing operations were
$8.0 billion
,
unchanged
versus the prior year period. An increase in operating income, primarily driven by gains on the sale of real estate, and the benefit of a lower effective tax rate were offset by an increase in other non-operating expense due mainly to a charge related to early extinguishment of certain long-term debt.
|
•
|
Diluted net earnings per share from continuing operations
increased 3% to
$2.87
due to reduced shares outstanding from shares tendered in the divestiture of the Beauty Brands to Coty.
|
•
|
Net earnings attributable to Procter & Gamble were
$13.1 billion
,
an increase of $4.6 billion or 53%
versus the prior year period, primarily driven by the
$5.3 billion
after-tax gain on the sale of the Beauty Brands in the current period partially offset by the base-period results of discontinued operations, including the net results of the Beauty Brands and a gain on the sale of the Batteries business.
|
•
|
Core net earnings attributable to Procter & Gamble, which excludes discontinued operations, the charge related to early extinguishment of certain long-term debt and incremental restructuring charges, increased 3% to $8.5 billion. Core net earnings per share
increased 7% to
$3.07
due to the increase in core net earnings and the reduction in shares outstanding.
|
•
|
Operating cash flow was
$9.1 billion
. Adjusted free cash flow, which is operating cash flow less capital expenditures and excluding tax payments related to the sale of the Beauty Brands, was
$7.0 billion
. Adjusted free cash flow productivity, which is the ratio of adjusted free cash flow to net earnings excluding a loss on early debt extinguishment and the gain on sale of the Beauty business, was
86%
.
|
|
Three Months Ended March 31
|
|||||||||
Amounts in millions, except per share amounts
|
2017
|
|
2016
|
|
% Chg
|
|||||
Net sales
|
$
|
15,605
|
|
|
$
|
15,755
|
|
|
(1
|
)%
|
Operating income
|
3,360
|
|
|
3,318
|
|
|
1
|
%
|
||
Net earnings from continuing operations
|
2,556
|
|
|
2,337
|
|
|
9
|
%
|
||
Net earnings from discontinued operations
|
—
|
|
|
446
|
|
|
(100
|
)%
|
||
Net earnings attributable to Procter & Gamble
|
2,522
|
|
|
2,750
|
|
|
(8
|
)%
|
||
Diluted net earnings per common share
|
0.93
|
|
|
0.97
|
|
|
(4
|
)%
|
||
Diluted net earnings per share from continuing operations
|
0.93
|
|
|
0.81
|
|
|
15
|
%
|
||
Core net earnings per common share
|
0.96
|
|
|
0.86
|
|
|
12
|
%
|
||
|
||||||||||
|
Three Months Ended March 31
|
|||||||||
COMPARISONS AS A % OF NET SALES
|
2017
|
|
2016
|
|
Basis Pt Chg
|
|||||
Gross profit
|
49.8%
|
|
49.8%
|
|
—
|
|||||
Selling, general & administrative expense
|
28.3%
|
|
28.7%
|
|
(40)
|
|||||
Operating income
|
21.5%
|
|
21.1%
|
|
40
|
|||||
Earnings from continuing operations before income taxes
|
21.4%
|
|
20.5%
|
|
90
|
|||||
Net earnings from continuing operations
|
16.4%
|
|
14.8%
|
|
160
|
|||||
Net earnings attributable to Procter & Gamble
|
16.2%
|
|
17.5%
|
|
(130)
|
|
Net Sales Change Drivers 2017 vs. 2016 (Three Months Ended March 31)*
|
||||||||||||
|
Volume with Acquisitions & Divestitures
|
|
Volume Excluding Acquisitions & Divestitures
|
|
Foreign Exchange
|
|
Price
|
|
Mix
|
|
Other**
|
|
Net Sales Growth
|
Beauty
|
(2)%
|
|
—%
|
|
(1)%
|
|
1%
|
|
—%
|
|
—%
|
|
(2)%
|
Grooming
|
—%
|
|
—%
|
|
—%
|
|
(2)%
|
|
(4)%
|
|
—%
|
|
(6)%
|
Health Care
|
4%
|
|
4%
|
|
(1)%
|
|
1%
|
|
1%
|
|
(1)%
|
|
4%
|
Fabric & Home Care
|
—%
|
|
1%
|
|
(2)%
|
|
—%
|
|
—%
|
|
1%
|
|
(1)%
|
Baby, Feminine & Family Care
|
1%
|
|
1%
|
|
(1)%
|
|
—%
|
|
—%
|
|
(1)%
|
|
(1)%
|
Total Company
|
—%
|
|
1%
|
|
(2)%
|
|
—%
|
|
—%
|
|
1%
|
|
(1)%
|
|
Nine Months Ended March 31
|
|||||||||
Amounts in millions, except per share amounts
|
2017
|
|
2016
|
|
% Chg
|
|||||
Net sales
|
$
|
48,979
|
|
|
$
|
49,197
|
|
|
—
|
%
|
Operating income
|
11,006
|
|
|
10,939
|
|
|
1
|
%
|
||
Net earnings from continuing operations
|
7,992
|
|
|
8,019
|
|
|
—
|
%
|
||
Net earnings from discontinued operations
|
5,217
|
|
|
627
|
|
|
N/A
|
|
||
Net earnings attributable to Procter & Gamble
|
13,111
|
|
|
8,557
|
|
|
53
|
%
|
||
Diluted net earnings per common share
|
4.76
|
|
|
3.00
|
|
|
59
|
%
|
||
Diluted net earnings per share from continuing operations
|
2.87
|
|
|
2.78
|
|
|
3
|
%
|
||
Core net earnings per common share
|
3.07
|
|
|
2.88
|
|
|
7
|
%
|
||
|
||||||||||
|
Nine Months Ended March 31
|
|||||||||
COMPARISONS AS A % OF NET SALES
|
2017
|
|
2016
|
|
Basis Pt Chg
|
|||||
Gross profit
|
50.5%
|
|
50.1%
|
|
40
|
|||||
Selling, general & administrative expense
|
28.0%
|
|
27.9%
|
|
10
|
|||||
Operating income
|
22.5%
|
|
22.2%
|
|
30
|
|||||
Earnings from continuing operations before income taxes
|
21.1%
|
|
21.7%
|
|
(60)
|
|||||
Net earnings from continuing operations
|
16.3%
|
|
16.3%
|
|
—
|
|||||
Net earnings attributable to Procter & Gamble
|
26.8%
|
|
17.4%
|
|
940
|
|
Net Sales Change Drivers 2017 vs. 2016 (Nine Months Ended March 31)*
|
||||||||||||
|
Volume with Acquisitions & Divestitures
|
|
Volume Excluding Acquisitions & Divestitures
|
|
Foreign Exchange
|
|
Price
|
|
Mix
|
|
Other**
|
|
Net Sales Growth
|
Beauty
|
(2)%
|
|
1%
|
|
(2)%
|
|
1%
|
|
1%
|
|
1%
|
|
(1)%
|
Grooming
|
1%
|
|
2%
|
|
(2)%
|
|
—%
|
|
(2)%
|
|
—%
|
|
(3)%
|
Health Care
|
4%
|
|
5%
|
|
(2)%
|
|
1%
|
|
1%
|
|
—%
|
|
4%
|
Fabric & Home Care
|
1%
|
|
2%
|
|
(2)%
|
|
(1)%
|
|
1%
|
|
—%
|
|
(1)%
|
Baby, Feminine & Family Care
|
2%
|
|
3%
|
|
(2)%
|
|
(1)%
|
|
(1)%
|
|
1%
|
|
(1)%
|
Total Company
|
1%
|
|
2%
|
|
(2)%
|
|
—%
|
|
—%
|
|
1%
|
|
—%
|
|
Three Months Ended March 31, 2017
|
|||||||||||||||||||
|
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
|
$
|
2,675
|
|
|
(2
|
)%
|
|
$
|
531
|
|
|
(12
|
)%
|
|
$
|
396
|
|
|
(14
|
)%
|
Grooming
|
1,525
|
|
|
(6
|
)%
|
|
437
|
|
|
(7
|
)%
|
|
333
|
|
|
(6
|
)%
|
|||
Health Care
|
1,841
|
|
|
4
|
%
|
|
470
|
|
|
14
|
%
|
|
310
|
|
|
12
|
%
|
|||
Fabric & Home Care
|
4,957
|
|
|
(1
|
)%
|
|
972
|
|
|
(4
|
)%
|
|
599
|
|
|
(8
|
)%
|
|||
Baby, Feminine & Family Care
|
4,471
|
|
|
(1
|
)%
|
|
890
|
|
|
(9
|
)%
|
|
555
|
|
|
(12
|
)%
|
|||
Corporate
|
136
|
|
|
28
|
%
|
|
36
|
|
|
N/A
|
|
|
363
|
|
|
N/A
|
|
|||
Total Company
|
$
|
15,605
|
|
|
(1
|
)%
|
|
$
|
3,336
|
|
|
3
|
%
|
|
$
|
2,556
|
|
|
9
|
%
|
|
Nine Months Ended March 31, 2017
|
|||||||||||||||||||
|
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
|
$
|
8,613
|
|
|
(1
|
)%
|
|
$
|
2,028
|
|
|
(8
|
)%
|
|
$
|
1,528
|
|
|
(8
|
)%
|
Grooming
|
4,972
|
|
|
(3
|
)%
|
|
1,580
|
|
|
2
|
%
|
|
1,217
|
|
|
3
|
%
|
|||
Health Care
|
5,774
|
|
|
4
|
%
|
|
1,574
|
|
|
10
|
%
|
|
1,052
|
|
|
6
|
%
|
|||
Fabric & Home Care
|
15,529
|
|
|
(1
|
)%
|
|
3,226
|
|
|
(3
|
)%
|
|
2,052
|
|
|
(6
|
)%
|
|||
Baby, Feminine & Family Care
|
13,711
|
|
|
(1
|
)%
|
|
2,973
|
|
|
(5
|
)%
|
|
1,932
|
|
|
(6
|
)%
|
|||
Corporate
|
380
|
|
|
17
|
%
|
|
(1,051
|
)
|
|
N/A
|
|
|
211
|
|
|
N/A
|
|
|||
Total Company
|
$
|
48,979
|
|
|
—
|
%
|
|
$
|
10,330
|
|
|
(3
|
)%
|
|
$
|
7,992
|
|
|
—
|
%
|
•
|
Volume in Hair Care
decreased low single digits
due to minor brand divestitures. Organic volume increased low single digits. Developed market volume decreased mid-single digits following increased pricing and due to competitive activity and reduced customer inventory. Developing regions declined low single digits due to minor brand divestitures. Organic volume increased low single digits in developing regions behind product innovation, increased marketing spending and market growth. Global market share of the Hair Care category
decreased half a point
.
|
•
|
Volume in Skin and Personal Care
decreased low single digits
. Volume decreased high single digits in developed regions following increased pricing and reduced promotional events at certain customers. Volume increased low single digits in developing regions due to product innovation and increased marketing. Global market share of the Skin and Personal Care category
decreased more than half a point
.
|
•
|
Volume in Hair Care
decreased low single digits
due to minor brand divestitures. Organic volume increased low single digits. Developed regions declined low single digits mainly due to competitive activity and developing regions declined low single digits due to minor brand divestitures. Organic volume increased mid-single digits in developing regions behind product innovation, increased marketing and market growth. Global market share of the Hair Care category
decreased less than a point
.
|
•
|
Volume in Skin and Personal Care
decreased low single digits
. Developed market volume decreased low single digits following increased pricing and due to competitive activity. Volume increased low single digits in developing regions including the impact of minor brand divestitures.
Organic volume was up mid-single digits in developing regions behind innovation, increased marketing and market growth. Global market share of the Skin and Personal Care category
decreased half a point
.
|
•
|
Shave Care volume
decreased low single digits
.
Shave Care volume decreased high single digits in developed regions due to competitive activity and increased mid-single digits in developing regions behind product innovation. Global market share of the Shave Care category
decreased more than half a point
.
|
•
|
Volume in Appliances
increased double digits
.
Volume was up double digits in developed regions due to product innovation and decreased mid-single digits in developing regions following increased pricing. Global market share of the Appliances category
increased more than a point
.
|
•
|
Shave Care volume
increased low single digits
. Shave Care volume decreased low single digits in developed regions due to competitive activity and increased low single digits in developing regions behind product innovation and increased marketing support. Organic volume increased mid-single digits in developing regions. Global market share of the Shave Care category
decreased half a point
.
|
•
|
Volume in Appliances
increased high single digits
. Volume was up double digits in developed regions and low single digits in developing regions due to product innovation. Global market share of the Appliances category
increased more than half a point
.
|
•
|
Oral Care volume
increased mid-single digits
.
Volume increased mid-single digits in developed regions and high single digits in developing regions driven by market growth and product innovation. Global market share of the Oral Care category
was unchanged
.
|
•
|
Volume in Personal Health Care
was unchanged
including the impact of minor brand divestitures. Organic volume increased low single digits globally and in developed regions with mid-single-digit growth in developing regions behind market growth, product innovation and expanded distribution. Global market share of the Personal Health Care category
increased slightly
.
|
•
|
Oral Care volume
increased mid-single digits
in both developed and developing regions driven by market growth and product innovation. Global market share of the Oral Care category
was unchanged
.
|
•
|
Volume in Personal Health Care
increased low single digits
with low single-digit growth in developed regions and mid-single-digit growth in developing regions behind market growth, product innovation and expanded distribution. Global market share of the Personal Health Care category
was unchanged
.
|
•
|
Fabric Care volume
was unchanged
as a low single-digit increase in developed regions due to product innovation was offset by a low single-digit decrease in developing regions driven primarily by competitive activities. Global market share of the Fabric Care category
decreased slightly
.
|
•
|
Home Care volume
increased low single digits
.
Developed market volume was unchanged while developing regions increased low single digits due to product innovation. Global market share of the Home Care category
was unchanged
.
|
•
|
Fabric Care volume
increased low single digits
as a mid-single-digit increase in developed regions due to innovation and increased marketing spending was 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 low single-digit increase in developed regions due to product innovation. Volume was unchanged in developing regions including 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 unchanged
.
|
•
|
Volume in Baby Care
decreased low single digits
caused by a low single-digit decrease in developing regions primarily due to competitive activity. Volume was unchanged in developed regions. Global market share of the Baby Care category
decreased a point
.
|
•
|
Volume in Feminine Care
increased low single digits
. Volume increased low single digits in developed regions due to product innovation and was unchanged in developing regions. Global market share of the Feminine Care category
was unchanged
.
|
•
|
Volume in Family Care, which is predominantly a North American business,
increased mid-single digits
driven by product innovation and increased marketing support. In the U.S., all-outlet share of the Family Care category
increased more than a point
.
|
•
|
Volume in Baby Care
increased low single digits
driven by a low single-digit increase in developing regions due to market growth, product innovation and decreased pricing, partially offset by competitive activity. Volume decreased low single digits in developed regions due to competitive activity. Global market share of the Baby Care category
decreased more than half a point
.
|
•
|
Volume in Feminine Care
increased low single digits
due to a low single-digit increase in developed regions driven by product innovation and market growth. Developing region volume was unchanged. Global market share of the Feminine Care category
was unchanged
.
|
•
|
Volume in Family Care, which is predominantly a North America business,
increased mid-single digits
driven by product innovation and increased merchandising. In the U.S., all-outlet share of the family care category
increased nearly a point
.
|
Three Months Ended March 31, 2017
|
Net Sales Growth
|
|
Foreign Exchange Impact
|
|
Acquisition/Divestiture Impact*
|
|
Organic Sales Growth
|
Beauty
|
(2)%
|
|
1%
|
|
2%
|
|
1%
|
Grooming
|
(6)%
|
|
—%
|
|
—%
|
|
(6)%
|
Health Care
|
4%
|
|
1%
|
|
1%
|
|
6%
|
Fabric & Home Care
|
(1)%
|
|
2%
|
|
—%
|
|
1%
|
Baby, Feminine & Family Care
|
(1)%
|
|
1%
|
|
1%
|
|
1%
|
Total Company
|
(1)%
|
|
2%
|
|
—%
|
|
1%
|
Nine Months Ended March 31, 2017
|
Net Sales Growth
|
|
Foreign Exchange Impact
|
|
Acquisition/Divestiture Impact*
|
|
Organic Sales Growth
|
Beauty
|
(1)%
|
|
2%
|
|
1%
|
|
2%
|
Grooming
|
(3)%
|
|
2%
|
|
1%
|
|
—%
|
Health Care
|
4%
|
|
2%
|
|
1%
|
|
7%
|
Fabric & Home Care
|
(1)%
|
|
2%
|
|
1%
|
|
2%
|
Baby, Feminine & Family Care
|
(1)%
|
|
2%
|
|
—%
|
|
1%
|
Total Company
|
—%
|
|
2%
|
|
—%
|
|
2%
|
Fiscal Year-to-Date, March 31, 2017
|
||||||||
Operating Cash Flow
|
|
Capital Spending
|
|
Free Cash Flow
|
|
Cash Tax Payment - Beauty Sale
|
|
Adjusted Free Cash Flow
|
$9,065
|
|
$(2,230)
|
|
$6,835
|
|
$204
|
|
$7,039
|
Fiscal Year-to-Date, March 31, 2017
|
||||||||||
Adjusted Free Cash Flow
|
|
Net Earnings
|
|
Loss on Early Debt Extinguishment
|
|
Gain on Sale of Beauty Brands
|
|
Adjusted Net Earnings
|
|
Adjusted Free Cash Flow Productivity
|
$7,039
|
|
$13,209
|
|
$345
|
|
$(5,335)
|
|
$8,219
|
|
86%
|
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures |
|||||||||||
Three Months Ended March 31, 2017
|
|||||||||||
|
AS REPORTED (GAAP)
|
|
INCREMENTAL RESTRUCTURING
|
|
ROUNDING
|
|
NON-GAAP (CORE)
|
||||
COST OF PRODUCTS SOLD
|
7,836
|
|
|
(113
|
)
|
|
1
|
|
|
7,724
|
|
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE
|
4,409
|
|
|
22
|
|
|
(1
|
)
|
|
4,430
|
|
OPERATING INCOME
|
3,360
|
|
|
91
|
|
|
—
|
|
|
3,451
|
|
INCOME TAX ON CONTINUING OPERATIONS
|
780
|
|
|
21
|
|
|
(1
|
)
|
|
800
|
|
NET EARNINGS ATTRIBUTABLE TO P&G
|
2,522
|
|
|
70
|
|
|
—
|
|
|
2,592
|
|
|
|
|
|
|
|
|
Core EPS
|
||||
DILUTED NET EARNINGS PER COMMON SHARE*
|
0.93
|
|
|
0.03
|
|
|
—
|
|
|
0.96
|
|
|
CHANGE VERSUS YEAR AGO
|
|
|
|
|
|
CORE EPS
|
12
|
%
|
|
|
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures |
|||||||||||||||||
Three Months Ended March 31, 2016
|
|||||||||||||||||
|
AS REPORTED (GAAP)
|
|
DISCONTINUED OPERATIONS
|
|
INCREMENTAL RESTRUCTURING
|
|
CHARGES FOR EUROPEAN LEGAL MATTERS
|
|
ROUNDING
|
|
NON-GAAP (CORE)
|
||||||
COST OF PRODUCTS SOLD
|
7,915
|
|
|
—
|
|
|
(174
|
)
|
|
—
|
|
|
—
|
|
|
7,741
|
|
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE
|
4,522
|
|
|
—
|
|
|
14
|
|
|
(13
|
)
|
|
(1
|
)
|
|
4,522
|
|
OPERATING INCOME
|
3,318
|
|
|
—
|
|
|
160
|
|
|
13
|
|
|
1
|
|
|
3,492
|
|
INCOME TAX ON CONTINUING OPERATIONS
|
889
|
|
|
—
|
|
|
33
|
|
|
2
|
|
|
(1
|
)
|
|
923
|
|
NET EARNINGS ATTRIBUTABLE TO P&G
|
2,750
|
|
|
(445
|
)
|
|
127
|
|
|
11
|
|
|
—
|
|
|
2,443
|
|
|
|
|
|
|
|
|
|
|
|
|
Core EPS:
|
||||||
DILUTED NET EARNINGS PER COMMON SHARE*
|
0.97
|
|
|
(0.16
|
)
|
|
0.04
|
|
|
—
|
|
|
0.01
|
|
|
0.86
|
|
|
CHANGE VERSUS YEAR AGO
|
|
|
|
|
|
CORE EPS
|
7
|
%
|
|
|
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures |
|||||||||||||||||
Nine Months Ended March 31, 2016
|
|||||||||||||||||
|
AS REPORTED (GAAP)
|
|
DISCONTINUED OPERATIONS
|
|
INCREMENTAL RESTRUCTURING
|
|
CHARGES FOR EUROPEAN LEGAL MATTERS
|
|
ROUNDING
|
|
NON-GAAP (CORE)
|
||||||
COST OF PRODUCTS SOLD
|
24,527
|
|
|
—
|
|
|
(389
|
)
|
|
—
|
|
|
—
|
|
|
24,138
|
|
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE
|
13,731
|
|
|
—
|
|
|
28
|
|
|
(13
|
)
|
|
(1
|
)
|
|
13,745
|
|
OPERATING INCOME
|
10,939
|
|
|
—
|
|
|
361
|
|
|
13
|
|
|
1
|
|
|
11,314
|
|
INCOME TAX ON CONTINUING OPERATIONS
|
2,664
|
|
|
—
|
|
|
77
|
|
|
2
|
|
|
(1
|
)
|
|
2,742
|
|
NET EARNINGS ATTRIBUTABLE TO P&G
|
8,557
|
|
|
(627
|
)
|
|
284
|
|
|
11
|
|
|
1
|
|
|
8,226
|
|
|
|
|
|
|
|
|
|
|
|
|
Core EPS:
|
||||||
DILUTED NET EARNINGS PER COMMON SHARE*
|
3.00
|
|
|
(0.22
|
)
|
|
0.10
|
|
|
—
|
|
|
—
|
|
|
2.88
|
|
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
|
||
1/01/2017 - 1/31/2017
|
5,875,036
|
|
|
$85.11
|
|
5,875,036
|
|
|
(3)
|
2/01/2017 - 2/28/2017
|
8,410,746
|
|
|
$89.17
|
|
8,410,746
|
|
|
(3)
|
3/01/2017 - 3/31/2017
|
8,248,367
|
|
|
$90.93
|
|
8,248,367
|
|
|
(3)
|
Total
|
22,534,149
|
|
|
$88.75
|
|
22,534,149
|
|
|
|
(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 April 26, 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 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
|
*
|
|
Compensatory plan or arrangement
|
|
|
|
+
|
|
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
|
|
|
|
|
|
April 26, 2017
|
|
|
|
/s/ VALARIE L. SHEPPARD
|
Date
|
|
|
|
(Valarie L. Sheppard)
|
|
|
|
|
Senior Vice President, Comptroller and Treasurer
|
Exhibit
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
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
|
+
|
|
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.
|
Confidential, Proprietary, Trade Secret Information & Period of Non-Competition:
|
Subject to the “Governmental Agencies” portion of the “
Release of Claims - Including Age Discrimination and Employment Claims”
above, 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 contained in this section, the federal Defend Trade Secrets Act of 2016 immunizes you against criminal and civil liability under federal or state trade secret laws for your disclosure of trade secrets that is made 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 your 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 you do not otherwise disclose the trade secret, except pursuant to court order.
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.
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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.
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.
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Non-Solicitation:
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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.
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Acknowledgements and Affirmations:
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Subject to the “Governmental Agencies” portion of the “
Release of Claims - Including Age Discrimination and Employment Claims”
above, 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.
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Assignment of Intellectual Property:
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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.
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Return of P&G Property:
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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.
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Ethics Compliance:
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Subject to the “Governmental Agencies” portion of the “
Release of Claims - Including Age Discrimination and Employment Claims”
above, 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.
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Agreement to Arbitrate Disputes:
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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.
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.
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Severability:
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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.
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Employment References:
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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:
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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.
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Your Attorney:
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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.
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Timing for Acceptance or Revocation:
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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.
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(1)
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I have reviewed this quarterly report on Form 10-Q of The Procter & Gamble Company;
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(2)
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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;
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(3)
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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;
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(4)
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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:
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a)
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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;
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b)
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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;
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c)
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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;
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d)
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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
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(5)
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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):
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a)
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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
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b)
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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.
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/s/ DAVID S. TAYLOR
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(David S. Taylor)
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President and Chief Executive Officer
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April 26, 2017
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Date
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(1)
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I have reviewed this quarterly report on Form 10-Q of The Procter & Gamble Company;
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(2)
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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;
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(3)
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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;
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(4)
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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:
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a)
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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;
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b)
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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;
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c)
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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;
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d)
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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
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(5)
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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):
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a)
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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
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b)
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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.
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/s/ JON R. MOELLER
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(Jon R. Moeller)
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Chief Financial Officer
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April 26, 2017
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Date
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(1)
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The Quarterly Report on Form 10-Q of the Company for the quarterly period ended
March 31, 2017
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in that Form 10-Q fairly presents, in all material respects, the financial conditions and results of operations of the Company.
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/s/ DAVID S. TAYLOR
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(David S. Taylor)
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President and Chief Executive Officer
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April 26, 2017
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Date
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(1)
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The Quarterly Report on Form 10-Q of the Company for the quarterly period ended
March 31, 2017
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in that Form 10-Q fairly presents, in all material respects, the financial conditions and results of operations of the Company.
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/s/ JON R. MOELLER
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(Jon R. Moeller)
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Chief Financial Officer
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April 26, 2017
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Date
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