x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Ohio
|
|
1-434
|
|
31-0411980
|
(State of Incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer Identification Number)
|
One Procter & Gamble Plaza, Cincinnati, Ohio
|
|
45202
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
Large accelerated filer
|
þ
|
|
|
Accelerated filer
|
¨
|
|
|
Non-accelerated filer
|
¨
|
(Do not check if smaller reporting company)
|
||||
|
|
|
|
|
Smaller reporting company
|
¨
|
|
|
|
|
|
|
Emerging growth company
|
¨
|
|
Item 1.
|
Financial Statements
|
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
Amounts in millions except per share amounts
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
NET SALES
|
$
|
17,395
|
|
|
$
|
16,856
|
|
|
$
|
34,048
|
|
|
$
|
33,374
|
|
Cost of products sold
|
8,667
|
|
|
8,298
|
|
|
16,896
|
|
|
16,400
|
|
||||
Selling, general and administrative expense
|
4,725
|
|
|
4,683
|
|
|
9,414
|
|
|
9,328
|
|
||||
OPERATING INCOME
|
4,003
|
|
|
3,875
|
|
|
7,738
|
|
|
7,646
|
|
||||
Interest expense
|
122
|
|
|
122
|
|
|
237
|
|
|
253
|
|
||||
Interest income
|
66
|
|
|
42
|
|
|
115
|
|
|
77
|
|
||||
Other non-operating income/(expense), net
|
86
|
|
|
(539
|
)
|
|
168
|
|
|
(476
|
)
|
||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
4,033
|
|
|
3,256
|
|
|
7,784
|
|
|
6,994
|
|
||||
Income taxes on continuing operations
|
1,472
|
|
|
695
|
|
|
2,353
|
|
|
1,558
|
|
||||
NET EARNINGS FROM CONTINUING OPERATIONS
|
2,561
|
|
|
2,561
|
|
|
5,431
|
|
|
5,436
|
|
||||
NET EARNINGS FROM DISCONTINUED OPERATIONS
|
—
|
|
|
5,335
|
|
|
—
|
|
|
5,217
|
|
||||
NET EARNINGS
|
2,561
|
|
|
7,896
|
|
|
5,431
|
|
|
10,653
|
|
||||
Less: Net earnings attributable to noncontrolling interests
|
66
|
|
|
21
|
|
|
83
|
|
|
64
|
|
||||
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE
|
$
|
2,495
|
|
|
$
|
7,875
|
|
|
$
|
5,348
|
|
|
$
|
10,589
|
|
|
|
|
|
|
|
|
|
||||||||
BASIC NET EARNINGS PER COMMON SHARE (1)
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
0.96
|
|
|
$
|
0.96
|
|
|
$
|
2.05
|
|
|
$
|
1.99
|
|
Earnings from discontinued operations
|
—
|
|
|
2.05
|
|
|
—
|
|
|
1.98
|
|
||||
BASIC NET EARNINGS PER COMMON SHARE
|
0.96
|
|
|
3.01
|
|
|
2.05
|
|
|
3.97
|
|
||||
DILUTED NET EARNINGS PER COMMON SHARE (1)
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
0.93
|
|
|
$
|
0.93
|
|
|
$
|
2.00
|
|
|
$
|
1.93
|
|
Earnings from discontinued operations
|
—
|
|
|
1.95
|
|
|
—
|
|
|
1.88
|
|
||||
DILUTED NET EARNINGS PER COMMON SHARE
|
0.93
|
|
|
2.88
|
|
|
2.00
|
|
|
3.81
|
|
||||
DIVIDENDS PER COMMON SHARE
|
$
|
0.6896
|
|
|
$
|
0.6695
|
|
|
$
|
1.3790
|
|
|
$
|
1.3390
|
|
Diluted Weighted Average Common Shares Outstanding
|
2,669.6
|
|
|
2,737.6
|
|
|
2,680.1
|
|
|
2,780.2
|
|
(1)
|
Basic net earnings per share and Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.
|
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
Amounts in millions
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
NET EARNINGS
|
$
|
2,561
|
|
|
$
|
7,896
|
|
|
$
|
5,431
|
|
|
$
|
10,653
|
|
OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX
|
|
|
|
|
|
|
|
||||||||
Financial statement translation
|
188
|
|
|
(1,988
|
)
|
|
1,028
|
|
|
(1,989
|
)
|
||||
Unrealized gains/(losses) on hedges
|
(167
|
)
|
|
864
|
|
|
(630
|
)
|
|
749
|
|
||||
Unrealized gains/(losses) on investment securities
|
(61
|
)
|
|
(55
|
)
|
|
(65
|
)
|
|
(68
|
)
|
||||
Unrealized gains/(losses) on defined benefit retirement plans
|
161
|
|
|
600
|
|
|
128
|
|
|
693
|
|
||||
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX
|
121
|
|
|
(579
|
)
|
|
461
|
|
|
(615
|
)
|
||||
TOTAL COMPREHENSIVE INCOME
|
2,682
|
|
|
7,317
|
|
|
5,892
|
|
|
10,038
|
|
||||
Less: Total comprehensive income attributable to noncontrolling interests
|
66
|
|
|
21
|
|
|
83
|
|
|
64
|
|
||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE
|
$
|
2,616
|
|
|
$
|
7,296
|
|
|
$
|
5,809
|
|
|
$
|
9,974
|
|
Amounts in millions
|
|
|
|
|
December 31, 2017
|
|
June 30, 2017
|
|||||
Assets
|
|
|
|
|
|
|
|
|||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
|
|
|
$
|
7,432
|
|
|
$
|
5,569
|
|
|
Available-for-sale investment securities
|
|
|
|
|
11,326
|
|
|
9,568
|
|
|||
Accounts receivable
|
|
|
|
|
5,182
|
|
|
4,594
|
|
|||
INVENTORIES
|
|
|
|
|
|
|
|
|||||
Materials and supplies
|
|
|
|
|
1,471
|
|
|
1,308
|
|
|||
Work in process
|
|
|
|
|
575
|
|
|
529
|
|
|||
Finished goods
|
|
|
|
|
3,085
|
|
|
2,787
|
|
|||
Total inventories
|
|
|
|
|
5,131
|
|
|
4,624
|
|
|||
Prepaid expenses and other current assets
|
|
|
|
|
2,143
|
|
|
2,139
|
|
|||
TOTAL CURRENT ASSETS
|
|
|
|
|
31,214
|
|
|
26,494
|
|
|||
PROPERTY, PLANT AND EQUIPMENT, NET
|
|
|
|
|
20,420
|
|
|
19,893
|
|
|||
GOODWILL
|
|
|
|
|
45,624
|
|
|
44,699
|
|
|||
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET
|
|
|
|
24,224
|
|
|
24,187
|
|
||||
OTHER NONCURRENT ASSETS
|
|
|
|
|
5,162
|
|
|
5,133
|
|
|||
TOTAL ASSETS
|
|
|
|
|
$
|
126,644
|
|
|
$
|
120,406
|
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|||||
Accounts payable
|
|
|
|
|
$
|
9,740
|
|
|
$
|
9,632
|
|
|
Accrued and other liabilities
|
|
|
|
|
7,820
|
|
|
7,024
|
|
|||
Debt due within one year
|
|
|
|
|
15,547
|
|
|
13,554
|
|
|||
TOTAL CURRENT LIABILITIES
|
|
|
|
|
33,107
|
|
|
30,210
|
|
|||
LONG-TERM DEBT
|
|
|
|
|
22,186
|
|
|
18,038
|
|
|||
DEFERRED INCOME TAXES
|
|
|
|
|
6,145
|
|
|
8,126
|
|
|||
OTHER NONCURRENT LIABILITIES
|
|
|
|
|
10,485
|
|
|
8,254
|
|
|||
TOTAL LIABILITIES
|
|
|
|
|
71,923
|
|
|
64,628
|
|
|||
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|||||
Preferred stock
|
|
|
|
|
986
|
|
|
1,006
|
|
|||
Common stock – shares issued –
|
December 2017
|
|
4,009.2
|
|
|
|
|
|
||||
|
June 2017
|
|
4,009.2
|
|
|
4,009
|
|
|
4,009
|
|
||
Additional paid-in capital
|
|
|
|
|
63,757
|
|
|
63,641
|
|
|||
Reserve for ESOP debt retirement
|
|
|
|
|
(1,229
|
)
|
|
(1,249
|
)
|
|||
Accumulated other comprehensive income/(loss)
|
|
|
|
|
(14,171
|
)
|
|
(14,632
|
)
|
|||
Treasury stock
|
|
|
|
|
(97,121
|
)
|
|
(93,715
|
)
|
|||
Retained earnings
|
|
|
|
|
97,881
|
|
|
96,124
|
|
|||
Noncontrolling interest
|
|
|
|
|
609
|
|
|
594
|
|
|||
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
|
|
54,721
|
|
|
55,778
|
|
|||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
$
|
126,644
|
|
|
$
|
120,406
|
|
|
Six Months Ended December 31
|
|
||||||
Amounts in millions
|
2017
|
|
2016
|
|
||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
$
|
5,569
|
|
|
$
|
7,102
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
||||
Net earnings
|
5,431
|
|
|
10,653
|
|
|
||
Depreciation and amortization
|
1,368
|
|
|
1,435
|
|
|
||
Loss on early extinguishment of debt
|
—
|
|
|
543
|
|
|
||
Share-based compensation expense
|
157
|
|
|
104
|
|
|
||
Deferred income taxes
|
(2,008
|
)
|
|
(448
|
)
|
|
||
Gain on sale of assets
|
(158
|
)
|
|
(5,343
|
)
|
|
||
Changes in:
|
|
|
|
|
||||
Accounts receivable
|
(547
|
)
|
|
(595
|
)
|
|
||
Inventories
|
(457
|
)
|
|
(247
|
)
|
|
||
Accounts payable, accrued and other liabilities
|
857
|
|
|
(296
|
)
|
|
||
Other operating assets and liabilities
|
2,524
|
|
|
152
|
|
|
||
Other
|
148
|
|
|
67
|
|
|
||
TOTAL OPERATING ACTIVITIES
|
7,315
|
|
|
6,025
|
|
|
||
INVESTING ACTIVITIES
|
|
|
|
|
||||
Capital expenditures
|
(1,900
|
)
|
|
(1,429
|
)
|
|
||
Proceeds from asset sales
|
201
|
|
|
280
|
|
|
||
Acquisitions, net of cash acquired
|
(101
|
)
|
|
(16
|
)
|
|
||
Purchases of short-term investments
|
(3,598
|
)
|
|
(1,739
|
)
|
|
||
Proceeds from sales and maturities of short-term investments
|
1,643
|
|
|
354
|
|
|
||
Pre-divestiture addition of restricted cash related to the Beauty Brands divestiture
|
—
|
|
|
(874
|
)
|
|
||
Cash transferred at closing related to the Beauty Brands divestiture
|
—
|
|
|
(475
|
)
|
|
||
Release of restricted cash upon closing of the Beauty Brands divestiture
|
—
|
|
|
1,870
|
|
|
||
Change in other investments
|
50
|
|
|
8
|
|
|
||
TOTAL INVESTING ACTIVITIES
|
(3,705
|
)
|
|
(2,021
|
)
|
|
||
FINANCING ACTIVITIES
|
|
|
|
|
||||
Dividends to shareholders
|
(3,636
|
)
|
|
(3,637
|
)
|
|
||
Change in short-term debt
|
1,524
|
|
|
2,715
|
|
|
||
Additions to long-term debt
|
5,072
|
|
|
2,641
|
|
|
||
Reductions of long-term debt
|
(1,281
|
)
|
|
(5,029
|
)
|
(1)
|
||
Treasury stock purchases
|
(4,253
|
)
|
|
(2,503
|
)
|
|
||
Impact of stock options and other
|
698
|
|
|
1,074
|
|
|
||
TOTAL FINANCING ACTIVITIES
|
(1,876
|
)
|
|
(4,739
|
)
|
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
129
|
|
|
(316
|
)
|
|
||
CHANGE IN CASH AND CASH EQUIVALENTS
|
1,863
|
|
|
(1,051
|
)
|
|
||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
7,432
|
|
|
$
|
6,051
|
|
|
(1)
|
Includes $543 of costs related to early extinguishment of debt.
|
|
|
|
Three Months Ended December 31
|
|
Six Months Ended December 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
|
|
$
|
3,233
|
|
|
$
|
853
|
|
|
$
|
655
|
|
|
$
|
6,371
|
|
|
$
|
1,689
|
|
|
$
|
1,287
|
|
|
2016
|
|
2,942
|
|
|
714
|
|
|
540
|
|
|
5,938
|
|
|
1,497
|
|
|
1,132
|
|
||||||
Grooming
|
2017
|
|
1,776
|
|
|
531
|
|
|
423
|
|
|
3,353
|
|
|
945
|
|
|
752
|
|
||||||
|
2016
|
|
1,789
|
|
|
614
|
|
|
469
|
|
|
3,447
|
|
|
1,143
|
|
|
884
|
|
||||||
Health Care
|
2017
|
|
2,212
|
|
|
668
|
|
|
455
|
|
|
4,114
|
|
|
1,123
|
|
|
760
|
|
||||||
|
2016
|
|
2,072
|
|
|
608
|
|
|
422
|
|
|
3,933
|
|
|
1,104
|
|
|
742
|
|
||||||
Fabric & Home Care
|
2017
|
|
5,434
|
|
|
1,101
|
|
|
714
|
|
|
10,817
|
|
|
2,280
|
|
|
1,483
|
|
||||||
|
2016
|
|
5,270
|
|
|
1,125
|
|
|
725
|
|
|
10,572
|
|
|
2,254
|
|
|
1,453
|
|
||||||
Baby, Feminine & Family Care
|
2017
|
|
4,613
|
|
|
933
|
|
|
597
|
|
|
9,158
|
|
|
1,897
|
|
|
1,227
|
|
||||||
|
2016
|
|
4,645
|
|
|
1,038
|
|
|
680
|
|
|
9,240
|
|
|
2,083
|
|
|
1,377
|
|
||||||
Corporate
|
2017
|
|
127
|
|
|
(53
|
)
|
|
(283
|
)
|
|
235
|
|
|
(150
|
)
|
|
(78
|
)
|
||||||
|
2016
|
|
138
|
|
|
(843
|
)
|
|
(275
|
)
|
|
244
|
|
|
(1,087
|
)
|
|
(152
|
)
|
||||||
Total Company
|
2017
|
|
$
|
17,395
|
|
|
$
|
4,033
|
|
|
$
|
2,561
|
|
|
$
|
34,048
|
|
|
$
|
7,784
|
|
|
$
|
5,431
|
|
|
2016
|
|
16,856
|
|
|
3,256
|
|
|
2,561
|
|
|
33,374
|
|
|
6,994
|
|
|
5,436
|
|
|
Beauty
|
|
Grooming
|
|
Health Care
|
|
Fabric & Home Care
|
|
Baby, Feminine & Family Care
|
|
Total Company
|
||||||||||||
Goodwill at June 30, 2017
|
$
|
12,791
|
|
|
$
|
19,627
|
|
|
$
|
5,878
|
|
|
$
|
1,857
|
|
|
$
|
4,546
|
|
|
$
|
44,699
|
|
Acquisitions and divestitures
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||||
Translation and other
|
277
|
|
|
371
|
|
|
103
|
|
|
26
|
|
|
75
|
|
|
852
|
|
||||||
Goodwill at December 31, 2017
|
$
|
13,141
|
|
|
$
|
19,998
|
|
|
$
|
5,981
|
|
|
$
|
1,883
|
|
|
$
|
4,621
|
|
|
$
|
45,624
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||
Intangible assets with determinable lives
|
$
|
7,431
|
|
|
$
|
5,038
|
|
Intangible assets with indefinite lives
|
21,831
|
|
|
—
|
|
||
Total identifiable intangible assets
|
$
|
29,262
|
|
|
$
|
5,038
|
|
|
Approximate Percent Change in Estimated Fair Value
|
||||
|
+50 bps Discount Rate
|
|
-50 bps Long-term Growth
|
||
Shave Care goodwill reporting unit
|
(10
|
)%
|
|
(7
|
)%
|
Gillette indefinite-lived intangible asset
|
(10
|
)%
|
|
(7
|
)%
|
|
Three Months Ended December 31, 2017
|
|
Three Months Ended December 31, 2016
|
||||||||||
CONSOLIDATED AMOUNTS
|
Total
|
|
Continuing Operations
|
Discontinued Operations
|
Total
|
||||||||
Net earnings
|
$
|
2,561
|
|
|
$
|
2,561
|
|
$
|
5,335
|
|
$
|
7,896
|
|
Net earnings attributable to noncontrolling interests
|
(66
|
)
|
|
(21
|
)
|
—
|
|
(21
|
)
|
||||
Net earnings attributable to P&G (Diluted)
|
2,495
|
|
|
2,540
|
|
5,335
|
|
7,875
|
|
||||
Preferred dividends, net of tax benefit
|
(62
|
)
|
|
(61
|
)
|
—
|
|
(61
|
)
|
||||
Net earnings attributable to P&G available to common shareholders (Basic)
|
$
|
2,433
|
|
|
$
|
2,479
|
|
$
|
5,335
|
|
$
|
7,814
|
|
|
|
|
|
|
|
||||||||
SHARES IN MILLIONS
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
2,533.9
|
|
|
2,596.6
|
|
2,596.6
|
|
2,596.6
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
||||||||
Conversion of preferred shares (1)
|
95.5
|
|
|
100.1
|
|
100.1
|
|
100.1
|
|
||||
Exercise of stock options and other unvested equity awards (2)
|
40.2
|
|
|
40.9
|
|
40.9
|
|
40.9
|
|
||||
Diluted weighted average common shares outstanding
|
2,669.6
|
|
|
2,737.6
|
|
2,737.6
|
|
2,737.6
|
|
||||
|
|
|
|
|
|
||||||||
PER SHARE AMOUNTS (3)
|
|
|
|
|
|
||||||||
Basic net earnings per common share
|
$
|
0.96
|
|
|
$
|
0.96
|
|
$
|
2.05
|
|
$
|
3.01
|
|
Diluted net earnings per common share
|
$
|
0.93
|
|
|
$
|
0.93
|
|
$
|
1.95
|
|
$
|
2.88
|
|
|
|
|
|
|
|
||||||||
|
Six Months Ended December 31, 2017
|
|
Six Months Ended December 31, 2016
|
||||||||||
CONSOLIDATED AMOUNTS
|
Total
|
|
Continuing Operations
|
Discontinued Operations
|
Total
|
||||||||
Net earnings
|
$
|
5,431
|
|
|
$
|
5,436
|
|
$
|
5,217
|
|
$
|
10,653
|
|
Net earnings attributable to noncontrolling interests
|
(83
|
)
|
|
(64
|
)
|
—
|
|
(64
|
)
|
||||
Net earnings attributable to P&G (Diluted)
|
5,348
|
|
|
5,372
|
|
5,217
|
|
10,589
|
|
||||
Preferred dividends, net of tax benefit
|
(124
|
)
|
|
(124
|
)
|
—
|
|
(124
|
)
|
||||
Net earnings attributable to P&G available to common shareholders (Basic)
|
$
|
5,224
|
|
|
$
|
5,248
|
|
$
|
5,217
|
|
$
|
10,465
|
|
|
|
|
|
|
|
||||||||
SHARES IN MILLIONS
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
2,542.2
|
|
|
2,635.6
|
|
2,635.6
|
|
2,635.6
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
||||||||
Conversion of preferred shares (1)
|
96.0
|
|
|
100.5
|
|
100.5
|
|
100.5
|
|
||||
Exercise of stock options and other unvested equity awards (2)
|
41.9
|
|
|
44.1
|
|
44.1
|
|
44.1
|
|
||||
Diluted weighted average common shares outstanding
|
2,680.1
|
|
|
2,780.2
|
|
2,780.2
|
|
2,780.2
|
|
||||
|
|
|
|
|
|
||||||||
PER SHARE AMOUNTS (3)
|
|
|
|
|
|
||||||||
Basic net earnings per common share
|
$
|
2.05
|
|
|
$
|
1.99
|
|
$
|
1.98
|
|
$
|
3.97
|
|
Diluted net earnings per common share
|
$
|
2.00
|
|
|
$
|
1.93
|
|
$
|
1.88
|
|
$
|
3.81
|
|
(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 24 million and 27 million for the three months ended December 31, 2017 and 2016, and approximately 22 million and 27 million for the six months ended December 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 December 31
|
|
Six Months Ended December 31
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Share-based compensation expense
|
$
|
73
|
|
|
$
|
74
|
|
|
$
|
157
|
|
|
$
|
118
|
|
Net periodic benefit cost for pension benefits (1)
|
52
|
|
|
257
|
|
|
103
|
|
|
353
|
|
||||
Net periodic benefit cost/(credit) for other retiree benefits (1)
|
(38
|
)
|
|
58
|
|
|
(76
|
)
|
|
39
|
|
(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, 2017, excluding the settlement, curtailment, and special termination costs related to the divestiture of the Beauty Brands business reported in Net earnings from discontinued operations.
|
|
Fair Value Asset
|
||||||
|
December 31, 2017
|
|
June 30, 2017
|
||||
Investments
|
|
|
|
||||
U.S. government securities
|
$
|
7,045
|
|
|
$
|
6,297
|
|
Corporate bond securities
|
4,281
|
|
|
3,271
|
|
||
Other investments
|
115
|
|
|
132
|
|
||
Total
|
$
|
11,441
|
|
|
$
|
9,700
|
|
|
Notional Amount
|
|
Derivative Fair Value Asset/(Liability)
|
||||||||||||
|
December 31, 2017
|
|
June 30, 2017
|
|
December 31, 2017
|
|
June 30, 2017
|
||||||||
Derivatives in Fair Value Hedging Relationships
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts (1)
|
$
|
4,640
|
|
|
$
|
4,552
|
|
|
$
|
137
|
|
|
$
|
178
|
|
Derivatives in Net Investment Hedging Relationships
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
6,504
|
|
|
$
|
6,102
|
|
|
$
|
(250
|
)
|
|
$
|
(163
|
)
|
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
5,374
|
|
|
$
|
4,969
|
|
|
$
|
(29
|
)
|
|
$
|
18
|
|
(1)
|
The fair value of the derivative asset/liability directly offsets the cumulative amount of the fair value hedging adjustment included in the carrying amount of the underlying debt obligation. The carrying amount of the underlying debt obligation, net of the fair value adjustment, was $4,755 as of December 31, 2017 and $4,705 as of June 30, 2017, respectively.
|
|
Amount of Gain/(Loss) Recognized in AOCI on Derivatives
|
||||||
|
December 31, 2017
|
|
June 30, 2017
|
||||
Derivatives in Net Investment Hedging Relationships
|
|
|
|
||||
Foreign exchange contracts
|
$
|
(156
|
)
|
|
$
|
(104
|
)
|
|
Amount of Gain/(Loss) Reclassified from AOCI into Earnings
|
||||||||||||||
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Derivatives in Cash Flow Hedging Relationships (1)
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
99
|
|
|
|
|
|
|
|
|
|
||||||||
|
Amount of Gain/(Loss) Recognized in Earnings
|
||||||||||||||
|
Three Months Ended December 31
|
|
Six Months Ended December 31
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Derivatives in Fair Value Hedging Relationships (2)
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
(38
|
)
|
|
$
|
(152
|
)
|
|
$
|
(41
|
)
|
|
$
|
(180
|
)
|
Debt
|
38
|
|
|
152
|
|
|
41
|
|
|
180
|
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives Not Designated as Hedging Instruments (3)
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
(1
|
)
|
|
$
|
(176
|
)
|
|
$
|
(2
|
)
|
|
$
|
(184
|
)
|
(1)
|
The gain or loss on cash flow hedging relationships is reclassified from AOCI into net income in the same period during which the related item affects earnings. Such amounts related to foreign currency contracts are included in the Consolidated Statements of Earnings in Selling, general and administrative expense (SG&A).
|
(2)
|
The gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are both recognized 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, 2017
|
$
|
(2,947
|
)
|
|
$
|
(25
|
)
|
|
$
|
(4,397
|
)
|
|
$
|
(7,263
|
)
|
|
$
|
(14,632
|
)
|
OCI before reclassifications (1)
|
(630
|
)
|
|
(61
|
)
|
|
1
|
|
|
1,028
|
|
|
338
|
|
|||||
Amounts reclassified from AOCI (2)
|
—
|
|
|
(4
|
)
|
|
127
|
|
|
—
|
|
|
123
|
|
|||||
Net current period OCI
|
(630
|
)
|
|
(65
|
)
|
|
128
|
|
|
1,028
|
|
|
461
|
|
|||||
Balance at December 31, 2017
|
$
|
(3,577
|
)
|
|
$
|
(90
|
)
|
|
$
|
(4,269
|
)
|
|
$
|
(6,235
|
)
|
|
$
|
(14,171
|
)
|
(1)
|
Net of tax expense/(benefit) of $(378), $0 and $23 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 $49 for gains/losses on hedges, investment securities and pension and other retiree benefit items, respectively.
|
•
|
Hedges: see Note 7 for classification of gains and losses from hedges in the Consolidated Statements of Earnings.
|
•
|
Investment securities: amounts reclassified from AOCI into Other non-operating income, net.
|
•
|
Pension and other retiree benefits: amounts reclassified from AOCI into Cost of products sold and SG&A and included in the computation of net periodic postretirement costs.
|
|
|
|
|
|
|
|
Six Months Ended December 31, 2017
|
|
|
||||||||||||||
|
Accrual Balance June 30, 2017
|
|
Charges Previously Reported (Three Months Ended September 30, 2017)
|
|
Charges for the Three Months Ended December 31, 2017
|
|
Cash Spent
|
|
Charges Against Assets
|
|
Accrual Balance December 31, 2017
|
||||||||||||
Separations
|
$
|
228
|
|
|
$
|
46
|
|
|
$
|
67
|
|
|
$
|
(74
|
)
|
|
$
|
—
|
|
|
$
|
267
|
|
Asset-related costs
|
—
|
|
|
86
|
|
|
58
|
|
|
—
|
|
|
(144
|
)
|
|
—
|
|
||||||
Other costs
|
49
|
|
|
25
|
|
|
29
|
|
|
(64
|
)
|
|
—
|
|
|
39
|
|
||||||
Total
|
$
|
277
|
|
|
$
|
157
|
|
|
$
|
154
|
|
|
$
|
(138
|
)
|
|
$
|
(144
|
)
|
|
$
|
306
|
|
|
Three Months Ended December 31, 2017
|
|
Six Months Ended December 31, 2017
|
||||
Beauty
|
$
|
13
|
|
|
$
|
33
|
|
Grooming
|
5
|
|
|
11
|
|
||
Health Care
|
3
|
|
|
7
|
|
||
Fabric & Home Care
|
25
|
|
|
55
|
|
||
Baby, Feminine & Family Care
|
50
|
|
|
101
|
|
||
Corporate (1)
|
58
|
|
|
104
|
|
||
Total Company
|
$
|
154
|
|
|
$
|
311
|
|
(1)
|
Corporate includes costs related to allocated overheads, including charges related to our Sales and Market Operations, Global Business Services and Corporate Functions activities.
|
|
Three Months Ended December 31, 2016
|
|
Six Months Ended December 31, 2016
|
|
||||
Net sales
|
$
|
—
|
|
|
$
|
1,159
|
|
|
Cost of products sold
|
—
|
|
|
450
|
|
|
||
Selling, general and administrative expense
|
—
|
|
|
783
|
|
|
||
Interest expense
|
—
|
|
|
14
|
|
|
||
Other non-operating income/(expense), net
|
—
|
|
|
16
|
|
|
||
Earnings/(loss) from discontinued operations before income taxes
|
—
|
|
|
(72
|
)
|
|
||
Income taxes on discontinued operations
|
—
|
|
|
46
|
|
|
||
Gain on sale of business before income taxes
|
5,197
|
|
|
5,197
|
|
|
||
Income tax expense/(benefit) on sale of business
|
(138
|
)
|
(1)
|
(138
|
)
|
(1)
|
||
Net earnings from discontinued operations
|
$
|
5,335
|
|
|
$
|
5,217
|
|
|
(1)
|
The income tax benefit of the Beauty Brands divestiture represents the reversal of underlying deferred tax balances offset by current tax expense related to the transaction.
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Overview
|
•
|
Summary of Results – Six Months Ended December 31, 2017
|
•
|
Economic Conditions and Uncertainties
|
•
|
Results of Operations – Three and Six Months Ended December 31, 2017
|
•
|
Business Segment Discussion – Three and Six Months Ended December 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 December 31
|
|
Six Months Ended December 31
|
||||
|
Net Sales
|
|
Net Earnings
|
|
Net Sales
|
|
Net Earnings
|
Beauty
|
19%
|
|
23%
|
|
19%
|
|
23%
|
Grooming
|
10%
|
|
15%
|
|
10%
|
|
14%
|
Health Care
|
13%
|
|
16%
|
|
12%
|
|
14%
|
Fabric & Home Care
|
31%
|
|
25%
|
|
32%
|
|
27%
|
Baby, Feminine & Family Care
|
27%
|
|
21%
|
|
27%
|
|
22%
|
Total Company
|
100%
|
|
100%
|
|
100%
|
|
100%
|
•
|
Net sales increased 2% to $34 billion. Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange, also increased 2%. Organic sales increased 7% in Beauty, 3% in Health Care and 2% in Fabric & Home Care. Organic sales declined 1% in Baby, Feminine & Family Care and 4% in Grooming.
|
•
|
Unit volume increased 1%, with organic volume up 2%. Volume increased low single digits in Fabric & Home Care, Health Care and Beauty, was unchanged in Grooming and decreased low single digits in Baby, Feminine & Family Care. Excluding the impacts of minor brand divestitures, organic volume was unchanged in Baby, Feminine & Family Care.
|
•
|
Net earnings from continuing operations were $5.4 billion, unchanged versus the prior year. An increase in earnings before income taxes, driven primarily by sales growth and prior year charges for early debt extinguishment, were offset by an increase in taxes due primarily to the transitional impact of the U.S. Tax Act.
|
•
|
Diluted net earnings per share from continuing operations increased 4% to $2.00 due primarily to a reduction in shares outstanding caused by both cash repurchases and shares acquired as part of the prior year Beauty Brands divestiture.
|
•
|
Net earnings attributable to Procter & Gamble decreased $5.2 billion or 49% versus the prior year period to $5.3 billion. The decline was primarily due to reduction in earnings from discontinued operations related to the base period gain from Beauty Brands divestiture.
|
•
|
Core net earnings attributable to Procter & Gamble, which represents net earnings from continuing operations, excluding U.S. tax reform transitional impacts, incremental restructuring charges and the base period charge for early extinguishment of debt, increased 4% to $6.1 billion. Core net earnings per share increased 8% to $2.28 due to the increase in core net earnings and the reduction in shares outstanding.
|
•
|
Operating cash flow was $7.3 billion. Free cash flow, which is operating cash flow less capital expenditures, was $5.4 billion. Adjusted free cash flow productivity, which is the ratio of free cash flow to adjusted net earnings, was 89%.
|
|
Three Months Ended December 31
|
||||
Amounts in millions, except per share amounts
|
2017
|
|
2016
|
|
% Chg
|
Net sales
|
$17,395
|
|
$16,856
|
|
3%
|
Operating income
|
4,003
|
|
3,875
|
|
3%
|
Net earnings from continuing operations
|
2,561
|
|
2,561
|
|
—%
|
Net earnings from discontinued operations
|
—
|
|
5,335
|
|
N/A
|
Net earnings attributable to Procter & Gamble
|
2,495
|
|
7,875
|
|
(68)%
|
Diluted net earnings per common share
|
0.93
|
|
2.88
|
|
(68)%
|
Diluted net earnings per share from continuing operations
|
0.93
|
|
0.93
|
|
—%
|
Core net earnings per common share
|
1.19
|
|
1.08
|
|
10%
|
|
|||||
|
Three Months Ended December 31
|
||||
COMPARISONS AS A % OF NET SALES
|
2017
|
|
2016
|
|
Basis Pt Chg
|
Gross profit
|
50.2%
|
|
50.8%
|
|
(60)
|
Selling, general & administrative expense
|
27.2%
|
|
27.8%
|
|
(60)
|
Operating income
|
23.0%
|
|
23.0%
|
|
—
|
Earnings from continuing operations before income taxes
|
23.2%
|
|
19.3%
|
|
390
|
Net earnings from continuing operations
|
14.7%
|
|
15.2%
|
|
(50)
|
Net earnings attributable to Procter & Gamble
|
14.3%
|
|
46.7%
|
|
(3,240)
|
•
|
a 90 basis point decline due to higher commodity costs,
|
•
|
a 70 basis point decline from unfavorable product mix (primarily within segments due to disproportionate growth of lower margin products forms in Fabric Care, large sizes and club channels in certain categories),
|
•
|
a 50 basis point decline from reduced pricing and
|
•
|
a 10 basis point decline from unfavorable foreign exchange.
|
•
|
a 340 basis-point reduction from the ongoing impacts of the Tax Act, as the impact of the lower blended U.S. Federal rate was largely offset by the inability to fully credit foreign taxes that were previously included in our estimated annual effective tax rate,
|
•
|
a 70 basis-point reduction from activity related to divestitures (30 basis points favorable in the current year versus 40 basis points unfavorable in the prior year),
|
•
|
a reduction of approximately 200 basis-points from favorable geographic mix of earnings,
|
•
|
a 380 basis-point increase from reduced favorable discrete impacts related to uncertain tax positions (0 basis points in the current year versus 380 basis points in the prior year) and
|
•
|
a 210 basis-point increase from the impact of the prior year extinguishment of long-term debt.
|
|
Six Months Ended December 31
|
||||
Amounts in millions, except per share amounts
|
2017
|
|
2016
|
|
% Chg
|
Net sales
|
$34,048
|
|
$33,374
|
|
2%
|
Operating income
|
7,738
|
|
7,646
|
|
1%
|
Net earnings from continuing operations
|
5,431
|
|
5,436
|
|
—%
|
Net earnings from discontinued operations
|
—
|
|
5,217
|
|
N/A
|
Net earnings attributable to Procter & Gamble
|
5,348
|
|
10,589
|
|
(49)%
|
Diluted net earnings per common share
|
2.00
|
|
3.81
|
|
(48)%
|
Diluted net earnings per share from continuing operations
|
2.00
|
|
1.93
|
|
4%
|
Core net earnings per common share
|
2.28
|
|
2.11
|
|
8%
|
|
|||||
|
Six Months Ended December 31
|
||||
COMPARISONS AS A % OF NET SALES
|
2017
|
|
2016
|
|
Basis Pt Chg
|
Gross profit
|
50.4%
|
|
50.9%
|
|
(50)
|
Selling, general & administrative expense
|
27.6%
|
|
27.9%
|
|
(30)
|
Operating income
|
22.7%
|
|
22.9%
|
|
(20)
|
Earnings from continuing operations before income taxes
|
22.9%
|
|
21.0%
|
|
190
|
Net earnings from continuing operations
|
16.0%
|
|
16.3%
|
|
(30)
|
Net earnings attributable to Procter & Gamble
|
15.7%
|
|
31.7%
|
|
(1,600)
|
•
|
a 80 basis point decline due to higher commodity costs,
|
•
|
a 50 basis point decline from unfavorable product mix (within segments due to disproportionate growth of large sizes and club channels and between segments caused by the disproportionate volume growth in Fabric & Home Care, which has lower than company-average gross margin),
|
•
|
a 30 basis point decline from unfavorable foreign exchange and
|
•
|
a 30 basis point decline from the impact of reduced pricing.
|
•
|
a 180 basis-point reduction from the ongoing impacts of the Tax Act, as the impact of the lower blended U. S. federal rate was largely offset by the inability to fully credit foreign taxes that were previously included in our estimated annual effective tax rate,
|
•
|
a 60 basis-point reduction from activity related to divestitures (10 basis points favorable in the current year versus 50 basis points unfavorable in the prior year),
|
•
|
a reduction of approximately 150 basis-points from favorable geographic mix of earnings,
|
•
|
a 170 basis-point increase from reduced favorable discrete impacts related to uncertain tax positions (20 basis points in the current year versus 190 basis points in the prior year),
|
•
|
a 120 basis-point increase from reduced excess tax benefits from share-based compensation (70 basis points in the current year versus 190 basis points in the prior year) and
|
•
|
a 100 basis-point increase from the prior year extinguishment of long-term debt.
|
|
Three Months Ended December 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
|
$
|
3,233
|
|
|
10
|
%
|
|
$
|
853
|
|
|
19
|
%
|
|
$
|
655
|
|
|
21
|
%
|
Grooming
|
1,776
|
|
|
(1
|
)%
|
|
531
|
|
|
(14
|
)%
|
|
423
|
|
|
(10
|
)%
|
|||
Health Care
|
2,212
|
|
|
7
|
%
|
|
668
|
|
|
10
|
%
|
|
455
|
|
|
8
|
%
|
|||
Fabric & Home Care
|
5,434
|
|
|
3
|
%
|
|
1,101
|
|
|
(2
|
)%
|
|
714
|
|
|
(2
|
)%
|
|||
Baby, Feminine & Family Care
|
4,613
|
|
|
(1
|
)%
|
|
933
|
|
|
(10
|
)%
|
|
597
|
|
|
(12
|
)%
|
|||
Corporate
|
127
|
|
|
(8
|
)%
|
|
(53
|
)
|
|
N/A
|
|
|
(283
|
)
|
|
N/A
|
|
|||
Total Company
|
$
|
17,395
|
|
|
3
|
%
|
|
$
|
4,033
|
|
|
24
|
%
|
|
$
|
2,561
|
|
|
—
|
%
|
|
Six Months Ended December 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
|
$
|
6,371
|
|
|
7
|
%
|
|
$
|
1,689
|
|
|
13
|
%
|
|
$
|
1,287
|
|
|
14
|
%
|
Grooming
|
3,353
|
|
|
(3
|
)%
|
|
945
|
|
|
(17
|
)%
|
|
752
|
|
|
(15
|
)%
|
|||
Health Care
|
4,114
|
|
|
5
|
%
|
|
1,123
|
|
|
2
|
%
|
|
760
|
|
|
2
|
%
|
|||
Fabric & Home Care
|
10,817
|
|
|
2
|
%
|
|
2,280
|
|
|
1
|
%
|
|
1,483
|
|
|
2
|
%
|
|||
Baby, Feminine & Family Care
|
9,158
|
|
|
(1
|
)%
|
|
1,897
|
|
|
(9
|
)%
|
|
1,227
|
|
|
(11
|
)%
|
|||
Corporate
|
235
|
|
|
(4
|
)%
|
|
(150
|
)
|
|
N/A
|
|
|
(78
|
)
|
|
N/A
|
|
|||
Total Company
|
$
|
34,048
|
|
|
2
|
%
|
|
$
|
7,784
|
|
|
11
|
%
|
|
$
|
5,431
|
|
|
—
|
%
|
•
|
Volume in Hair Care increased low single digits. Developed market volume increased low single digits due to innovation. Volume in developing regions increased low single digits due to product innovation and in-store improvements. Global market share of the Hair Care category was unchanged.
|
•
|
Volume in Skin and Personal Care increased mid-single digits. Volume increased low single digits in developed regions due to product innovation and retail inventory build to support new product launches. Volume increased mid-single digits in
|
•
|
Volume in Hair Care was unchanged. Volume in developed regions was unchanged and was down low single digits on an organic basis, as growth from innovation was more than offset by lower promotional activity versus the base period. Volume in developing regions volume increased low single digits due to improved in-store executions and product innovation. Global market share of the Hair Care category was unchanged.
|
•
|
Volume in Skin and Personal Care increased low single digits. Volume was unchanged in developed regions as growth from innovation was offset by reductions following increased pricing. Volume increased mid-single digits in developing regions due to product innovation and increased marketing. Global market share of the Skin and Personal Care category decreased slightly.
|
•
|
Shave Care volume increased low single digits. Developed regions volume increased mid-single digits due to increased price competitiveness following price reductions and innovation. Developing regions decreased low single digits due to trade inventory reductions in certain markets. Global market share of the Shave Care category was unchanged.
|
•
|
Volume in Appliances increased double digits. Volume increased double digits in developed regions and high-single digits in developing regions, both due to product innovation and overall market growth. Global market share of the Appliances category was unchanged.
|
•
|
Volume in Shave Care decreased low single digits. Volume in developed regions was unchanged. Developing regions declined low single digits due to trade inventory reductions in certain markets. Global market share of the Shave Care category decreased half a point.
|
•
|
Volume in Appliances increased double digits in both developed and developing regions due to product innovation. Global market share of the Appliances category increased more than a point.
|
•
|
Oral Care volume increased low single digits. Volume increased mid-single digits in developed regions driven by product innovation and marketing investment on premium power brush segment. Volume decreased mid-single digits in developing regions due to trade inventory reductions and competitive activities. Global market share of the Oral Care category was unchanged.
|
•
|
Volume in Personal Health Care increased high single digits. Volume increased mid-single digits in developed regions due to increased consumption from a strong Cough / Cold season. Volume increased double digits in developing regions due in part to distributor inventory build. Global market share of the Personal Health Care category increased less than half a point.
|
•
|
Oral Care volume increased low single digits. Developed regions volume increased mid-single digits driven by product innovation and marketing investments on premium power brush segment. Volume in developing regions declined low single digits due to trade inventory reductions and competitive activities. Global market share of the Oral Care category decreased slightly.
|
•
|
Volume in Personal Health Care increased low single digits. Volume decreased low single digits in developed regions due to relatively lower levels of product innovation versus year ago. Volume in developing regions increased mid-single digits and high single digits on organic basis, due in part to distributer inventory build. Global market share of the Personal Health Care category increased slightly.
|
•
|
Fabric Care volume increased low single digits. Volume in both developed and developing regions grew low single digits due to product innovation and lower pricing driven by promotional spending. Excluding the impact of minor brand divestitures, organic volume grew mid-single digits. Global market share of the Fabric Care category increased less than half a point.
|
•
|
Home Care volume increased mid-single digits. Volume in developed regions increased mid-single digits due to product innovation, increased marketing and lower pricing driven by promotional spending. Volume in developing regions increased high single digits due to marketing investments. Global market share of the Home Care category was unchanged.
|
•
|
Fabric Care volume increased low single digits. Volume in developed regions grew mid-single digits due to product innovation and lower pricing driven by promotional spending. Volume in developing regions grew low single digits due to product innovation and market growth. Global market share of the Fabric Care category was unchanged.
|
•
|
Home Care volume increased low single digits. Volume in developed regions increased low single digits due to product innovation and lower pricing driven by promotional spending. Volume in developing regions increased mid-single digits due to product innovation and marketing investments. Global market share of the Home Care category was unchanged.
|
•
|
Volume in Baby Care decreased mid-single digits. Volume in developed regions declined low single digits due to competitive activities. Volume in developing regions declined high single digits due to volume decline following increased pricing, competitive activity and reduction in trade inventories. Global market share of the Baby Care category decreased two points.
|
•
|
Volume in Feminine Care was unchanged. Organic volume, which excludes the impact of minor brand divestitures, increased low single digits. Organic volume increased mid-single digits in developed regions due to product innovation. Volume decreased low single digits in developing regions due to trade inventory reductions. Global market share of the Feminine Care category increased less than half a point.
|
•
|
Volume in Family Care, which is predominantly a North American business, increased low single digits driven by product innovation, distribution gains and increased media investments. In the U.S., all-outlet share of the Family Care category decreased less than half a point.
|
•
|
Baby Care volume decreased mid-single digits. Volume in developed regions declined low single digits due to competitive activities. Volume in developing regions declined high single digits due to competitive activity, volume decline following
|
•
|
Feminine Care volume was unchanged. Organic volume, which excludes the impact of minor brand divestitures, increased low single digits. Organic volume increased low single digits in developed regions due to product innovation. Volume increased low single digits in developing regions due to product innovation and market growth. Global market share of the Feminine Care category increased slightly.
|
•
|
Family Care volume increased mid-single digits, driven by product innovation, distribution gains and increased marketing activities. In the U.S., all-outlet share of the Family Care category increased nearly half a point.
|
Three Months Ended December 31, 2017
|
Net Sales Growth
|
|
Foreign Exchange Impact
|
|
Acquisition/Divestiture Impact (1)
|
|
Organic Sales Growth
|
Beauty
|
10%
|
|
(1)%
|
|
—%
|
|
9%
|
Grooming
|
(1)%
|
|
(2)%
|
|
—%
|
|
(3)%
|
Health Care
|
7%
|
|
(3)%
|
|
—%
|
|
4%
|
Fabric & Home Care
|
3%
|
|
(1)%
|
|
1%
|
|
3%
|
Baby, Feminine & Family Care
|
(1)%
|
|
(1)%
|
|
1%
|
|
(1)%
|
Total Company
|
3%
|
|
(1)%
|
|
—%
|
|
2%
|
Six Months Ended December 31, 2017
|
Net Sales Growth
|
|
Foreign Exchange Impact
|
|
Acquisition/Divestiture Impact (1)
|
|
Organic Sales Growth
|
Beauty
|
7%
|
|
—%
|
|
—%
|
|
7%
|
Grooming
|
(3)%
|
|
(2)%
|
|
1%
|
|
(4)%
|
Health Care
|
5%
|
|
(2)%
|
|
—%
|
|
3%
|
Fabric & Home Care
|
2%
|
|
—%
|
|
—%
|
|
2%
|
Baby, Feminine & Family Care
|
(1)%
|
|
(1)%
|
|
1%
|
|
(1)%
|
Total Company
|
2%
|
|
(1)%
|
|
1%
|
|
2%
|
Fiscal Year-to-Date, December 31, 2017
|
||||
Operating Cash Flow
|
|
Capital Spending
|
|
Free Cash Flow
|
$7,315
|
|
$(1,900)
|
|
$5,415
|
Fiscal Year-to-Date, December 31, 2017
|
||||||
Free Cash Flow
|
|
Net Earnings
|
Net U.S. Tax Reform Charge
|
Adjusted Net Earnings
|
|
Adjusted Free Cash Flow Productivity
|
$5,415
|
|
$5,431
|
$628
|
$6,059
|
|
89%
|
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures |
||||||||||||||
Three Months Ended December 31, 2017
|
||||||||||||||
|
AS REPORTED (GAAP)
|
|
INCREMENTAL RESTRUCTURING
|
|
TRANSITIONAL IMPACTS OF U.S. TAX REFORM
|
|
ROUNDING
|
|
NON-GAAP (CORE)
|
|||||
COST OF PRODUCTS SOLD
|
8,667
|
|
|
(86
|
)
|
|
—
|
|
|
1
|
|
|
8,582
|
|
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
|
4,725
|
|
|
14
|
|
|
—
|
|
|
(1
|
)
|
|
4,738
|
|
OPERATING INCOME
|
4,003
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
4,075
|
|
INCOME TAX ON CONTINUING OPERATIONS
|
1,472
|
|
|
21
|
|
|
(628
|
)
|
|
—
|
|
|
865
|
|
NET EARNINGS ATTRIBUTABLE TO P&G
|
2,495
|
|
|
51
|
|
|
628
|
|
|
—
|
|
|
3,174
|
|
|
|
|
|
|
|
|
|
|
Core EPS
|
|||||
DILUTED NET EARNINGS PER COMMON SHARE (1)
|
0.93
|
|
|
0.02
|
|
|
0.24
|
|
|
—
|
|
|
1.19
|
|
|
|
CHANGE VERSUS YEAR AGO
|
|
|
|
|
|
|
|
CORE EPS
|
10
|
%
|
|
|
|
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures |
|||||||||||||||||
Three Months Ended December 31, 2016
|
|||||||||||||||||
|
AS REPORTED (GAAP)
|
|
DISCONTINUED OPERATIONS
|
|
INCREMENTAL RESTRUCTURING
|
|
EARLY DEBT EXTINGUISHMENT
|
|
ROUNDING
|
|
NON-GAAP (CORE)
|
||||||
COST OF PRODUCTS SOLD
|
8,298
|
|
|
—
|
|
|
(128
|
)
|
|
—
|
|
|
—
|
|
|
8,170
|
|
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
|
4,683
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
1
|
|
|
4,720
|
|
OPERATING INCOME
|
3,875
|
|
|
—
|
|
|
92
|
|
|
—
|
|
|
(1
|
)
|
|
3,966
|
|
INCOME TAX ON CONTINUING OPERATIONS
|
695
|
|
|
—
|
|
|
21
|
|
|
198
|
|
|
(1
|
)
|
|
913
|
|
NET EARNINGS ATTRIBUTABLE TO P&G
|
7,875
|
|
|
(5,335
|
)
|
|
71
|
|
|
345
|
|
|
—
|
|
|
2,956
|
|
|
|
|
|
|
|
|
|
|
|
|
Core EPS:
|
||||||
DILUTED NET EARNINGS PER COMMON SHARE (1)
|
2.88
|
|
|
(1.95
|
)
|
|
0.03
|
|
|
0.13
|
|
|
(0.01
|
)
|
|
1.08
|
|
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures |
||||||||||||||
Six Months Ended December 31, 2017
|
||||||||||||||
|
AS REPORTED (GAAP)
|
|
INCREMENTAL RESTRUCTURING
|
|
TRANSITIONAL IMPACTS OF U.S. TAX REFORM
|
|
ROUNDING
|
|
NON-GAAP (CORE)
|
|||||
COST OF PRODUCTS SOLD
|
16,896
|
|
|
(186
|
)
|
|
—
|
|
|
1
|
|
|
16,711
|
|
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
|
9,414
|
|
|
19
|
|
|
—
|
|
|
(1
|
)
|
|
9,432
|
|
OPERATING INCOME
|
7,738
|
|
|
167
|
|
|
—
|
|
|
—
|
|
|
7,905
|
|
INCOME TAX ON CONTINUING OPERATIONS
|
2,353
|
|
|
41
|
|
|
(628
|
)
|
|
—
|
|
|
1,766
|
|
NET EARNINGS ATTRIBUTABLE TO P&G
|
5,348
|
|
|
126
|
|
|
628
|
|
|
—
|
|
|
6,102
|
|
|
|
|
|
|
|
|
|
|
Core EPS
|
|||||
DILUTED NET EARNINGS PER COMMON SHARE (1)
|
2.00
|
|
|
0.05
|
|
|
0.23
|
|
|
—
|
|
|
2.28
|
|
|
|
CHANGE VERSUS YEAR AGO
|
|
|
|
|
|
|
|
CORE EPS
|
8
|
%
|
|
|
|
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures |
|||||||||||||||||
Six Months Ended December 31, 2016
|
|||||||||||||||||
|
AS REPORTED (GAAP)
|
|
DISCONTINUED OPERATIONS
|
|
INCREMENTAL RESTRUCTURING
|
|
EARLY DEBT EXTINGUISHMENT
|
|
ROUNDING
|
|
NON-GAAP (CORE)
|
||||||
COST OF PRODUCTS SOLD
|
16,400
|
|
|
—
|
|
|
(239
|
)
|
|
—
|
|
|
—
|
|
|
16,161
|
|
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
|
9,328
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
9,387
|
|
OPERATING INCOME
|
7,646
|
|
|
—
|
|
|
180
|
|
|
—
|
|
|
—
|
|
|
7,826
|
|
INCOME TAX ON CONTINUING OPERATIONS
|
1,558
|
|
|
—
|
|
|
36
|
|
|
198
|
|
|
—
|
|
|
1,792
|
|
NET EARNINGS ATTRIBUTABLE TO P&G
|
10,589
|
|
|
(5,217
|
)
|
|
144
|
|
|
345
|
|
|
—
|
|
|
5,861
|
|
|
|
|
|
|
|
|
|
|
|
|
Core EPS:
|
||||||
DILUTED NET EARNINGS PER COMMON SHARE (1)
|
3.81
|
|
|
(1.88
|
)
|
|
0.05
|
|
|
0.12
|
|
|
0.01
|
|
|
2.11
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
ordering and managing materials from suppliers;
|
•
|
converting materials to finished products;
|
•
|
shipping products to customers;
|
•
|
marketing and selling products to consumers;
|
•
|
collecting, transferring, storing and/or processing customer, consumer, employee, vendor, investor, and other stakeholder information and personal data;
|
•
|
summarizing and reporting results of operations, including financial reporting;
|
•
|
hosting, processing and sharing, as appropriate, confidential and proprietary research, business plans and financial information;
|
•
|
collaborating via an online and efficient means of global business communications;
|
•
|
complying with regulatory, legal and tax requirements;
|
•
|
providing data security; and
|
•
|
handling other processes necessary to manage our business.
|
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
|
||
10/01/2017 - 10/31/2017
|
5,501,195
|
|
|
$90.89
|
|
5,501,195
|
|
|
(3)
|
11/01/2017 - 11/30/2017
|
5,683,380
|
|
|
$87.98
|
|
5,683,380
|
|
|
(3)
|
12/01/2017 - 12/31/2017
|
8,220,899
|
|
|
$91.23
|
|
8,220,899
|
|
|
(3)
|
Total
|
19,405,474
|
|
|
$90.18
|
|
19,405,474
|
|
|
|
(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 January 23, 2018, the Company stated that in fiscal year 2018 the Company expects to reduce outstanding shares through direct share repurchases at a value of approximately $6 to $8 billion, 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
|
|
|
|
|
3-1
|
|
|
Amended Articles of Incorporation (as amended by shareholders at the annual meeting on October 11, 2011 and consolidated by the Board of Directors on April 8, 2016) (Incorporated by reference to Exhibit (3-1) of the Company's Form 10-K for the year ended June 30, 2016)
|
|
|
|
|
3-2
|
|
|
Regulations (as approved by the Board of Directors on April 8, 2016, pursuant to authority granted by shareholders at the annual meeting on October 13, 2009) (Incorporated by reference to Exhibit (3-2) of the Company's Form 10-K for the year ended June 30, 2016)
|
|
|
|
|
4-1
|
|
|
Indenture, dated as of September 3, 2009, between the Company and Deutsche Bank Trust Company Americas, as Trustee (Incorporated by reference to Exhibit (4-1) of the Company Annual Report on Form 10-K for the year ended June 30, 2015)
|
|
|
|
|
10-1
|
|
|
Regulations of the Compensation and Leadership Development Committee for The Procter & Gamble 2014 Stock and Incentive Compensation Plan * +
|
|
|
|
|
10-2
|
|
|
Company’s Form of Separation Letter and Release * +
|
|
|
|
|
12
|
|
|
Computation of Ratio of Earnings to Fixed Charges
|
|
|
|
|
31.1
|
|
|
Rule 13a-14(a)/15d-14(a) Certification – Chief Executive Officer
|
|
|
|
|
31.2
|
|
|
Rule 13a-14(a)/15d-14(a) Certification – Chief Financial Officer
|
|
|
|
|
32.1
|
|
|
Section 1350 Certifications – Chief Executive Officer
|
|
|
|
|
32.2
|
|
|
Section 1350 Certifications – Chief Financial Officer
|
|
|
|
|
101.INS (1)
|
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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
|
*
|
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
|
|
|
|
|
|
January 23, 2018
|
|
|
|
/s/ VALARIE L. SHEPPARD
|
Date
|
|
|
|
(Valarie L. Sheppard)
|
|
|
|
|
Senior Vice President, Comptroller and Treasurer
|
Exhibit
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.INS (1)
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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.
|
I.
|
AUTHORITY FOR REGULATIONS
|
II.
|
ADMINISTRATION
|
1.
|
Any capitalized terms used in these Regulations that are not otherwise defined herein are defined in the2014 Plan.
|
2.
|
The Chief Executive Officer (“CEO”) is authorized to submit recommendations to the Committee for Awards, except for himself.
|
3.
|
The Chief Human Resources Officer (“CHRO”) and the Chief Legal Officer and Secretary (“CLO”)are each individually authorized to execute Award Agreements consistent with the 2014 Plan, these Regulations, approved executive compensation programs (e.g., the Performance Stock Program), and/or Committee action through resolution.
|
4.
|
The CHRO is authorized to specify an appropriate time and manner for acceptance of each Award. Any Award not accepted through the specified means within the period specified by the Committee or the CHRO at the time of the grant shall be considered to be canceled.
|
5.
|
The CLO shall maintain the books and records of Awards granted by the Committee. and shall report at each meeting of the Committee at which Awards are to be considered the total number of shares available for award under the 2014 Plan. The Secretary shall inform the Treasurer and the Plan Administrator of Awards granted on a regular basis.
|
6.
|
The Treasurer is authorized to delegate to an appropriate manager reporting to the Treasurer the authority to acquire, transfer and deliver shares for the purposes of the Plans.
|
7.
|
In the absence of the CLO, an Assistant Secretary is hereby authorized to perform the duties and have the powers of the CLO outlined in these Regulations. In the absence of the Treasurer of the Company or of a subsidiary, an Assistant Treasurer of the appropriate Company is hereby authorized to perform the duties and have the powers of the Treasurer outlined in these Regulations.
|
8.
|
The Company’s Stock Plan Administration group, shall be the Plan Administrator and is authorized to develop procedures necessary to administer Awards and to engage brokers or other consultants that may be advisable for the administration of the Plan.
|
III.
|
SUSPENSION, TERMINATION, WITHHOLDING, AND REPAYMENT OF AWARDS
|
1.
|
The CHRO and the CLO are each hereby individually authorized to temporarily withhold payment of an unpaid Award or suspend on a conditional or temporary basis the outstanding Awards of any Participant if the CHRO or CLO believes that such Participant has engaged in action that violates the terms and conditions governing the Award, including but not limited to any violation of Article 6 of the 2014 Plan. If the Participant is a Principal Officer of the Company, the Chief Executive Officer (“CEO”) must concur with the decision to conditionally or temporarily suspend Awards. The CLO or the Assistant Secretary may authorize a temporary payroll hold up to fourteen days to enable the Company to investigate whether the Participant has violated the terms and conditions governing an Award.
|
2.
|
In order to permanently suspend, terminate, withhold payment, demand repayment of, or otherwise restrict or recoup an Award, within a reasonable time of any such conditional or temporary suspension, the CHRO and CLO must each concur that the Participant has engaged in action that violates the terms and conditions governing the Award. In a case involving a Principal Officer of the Company, the concurrence of the CEO is also required. If there is concurrence, the Awards shall be immediately terminated without any further action. If they do not concur, the suspension shall be lifted.
|
3.
|
All alleged violations of the terms and conditions governing an Award held by the CHRO, CLO and CEO shall be reviewed by the Committee. If the Committee determines a violation has occurred, the Committee may terminate the individual’s outstanding Awards, withhold payment of an Award, or require repayment of an Award.
|
4.
|
Actions that significantly contravene the Company’s “Statement of Purpose, Values and Principles” (“PVP”) will be considered to be actions “significantly contrary to the best interests of the Company” and a violation of Article 6.1(d) of the 2014 Plan. This standard also includes any action taken or threatened by the Participant that the Committee determines has, or is reasonably likely to have, a significant adverse impact on the reputation, goodwill, stability, operation, personnel retention and management, or business of the Company or any subsidiary.
|
IV.
|
TERMS AND CONDITIONS OF AWARDS
|
1.
|
Award Agreements will include the Grant Date, Vest Date, Expiration Date (for Stock Options and SARs), and Settlement Date (for RSUs) determined by the Committee.
|
2.
|
Impact of Termination of Employment (other than Termination for Cause) is determined by the Committee and will be included in the Award Agreement. Except for the reasons listed in Section IV 3 through 5 of these Regulations, or unless otherwise approved by the Committee, if a Participant terminates employment for any reason before the Settlement Date (for RSUs) or the Expiration Date and prior to exercising the Award (for Stock Options and SARs), the Award will be forfeited immediately upon termination of employment.
|
3.
|
Notwithstanding Section IV.2 of these Regulations, Awards become non-forfeitable upon death of a Participant.
|
4.
|
Notwithstanding Section IV.2 of these Regulations, Awards granted under the STAR program in lieu of cash are non-forfeitable.
|
5.
|
Notwithstanding Section IV.2 of these Regulations, Awards granted under the Long-Term Incentive Program (LTIP) become non-forfeitable if the Participant terminates employment after the last business day of the fiscal year in which the Award was granted on account of Retirement, Disability or in conjunction with a written separation agreement that provides for retention of the Award.
|
V.
|
EXERCISE OR SETTLEMENT OF AWARDS
|
1.
|
Pursuant to Article 6.1 of the 2014 Plan, if upon the delivery of notice to exercise, the Participant refuses to certify intent to either remain in the employ of the Company or one of its Subsidiaries for at least one (1) year or otherwise comply with the non-compete provisions of Article 6, a Principal Officer or an employee of the Company or any of its Subsidiaries who has the title of Vice President shall be informed of the Participant’s refusal.
|
2.
|
Notice of exercise of a Stock Option or SAR shall be given prior to the expiration of the Award and shall be given in the form and manner established by the Plan Administrator.
|
3.
|
The Plan Administrator is authorized from time to time to suspend the exercise of any Stock Option or SAR, the delivery of any Shares or the settlement of any RSUs, where such suspension is deemed necessary or appropriate for corporate purposes. No such suspension shall extend the life of the Stock Option or SAR right beyond its expiration date, and in no event will there be a suspension in the five (5) calendar days immediately preceding the expiration date.
|
4.
|
The Treasurer or CHRO with Treasurer concurrence, is hereby authorized to establish such terms and conditions regarding exercise or delivery of any Award as is required or advisable to accommodate for differences in local law, tax policy or custom, including but not limited to, requiring that Participants: (i) hold shares acquired upon exercise of any stock option for a specified period of time; (ii) hold shares acquired upon exercise of any stock option outside
|
5.
|
In the event that the New York Stock Exchange is closed for business on the day upon which shares of the Company's Common Stock are to be valued, the Plan Administrator shall value such shares on the immediately following business day of such Exchange on which day such stock is traded.
|
6.
|
Awards may be surrendered for cancellation before exercise or settlement in the manner prescribed by the Plan Administrator. Acceptance of such surrender for cancellation before exercise or settlement shall not constitute waiver of the Participant’s obligations under Article 6 of the 2014 Plan.
|
VI.
|
AWARDS GRANTED TO PARTICIPANTS LOCATED OUTSIDE THE UNITED STATES
|
1.
|
Where local law would prohibit enforcement of provisions 6.1, 6.2 or 6.3 of the Plan, the Committee authorizes the CHRO to waive any or all of those provisions in the Award Agreement.
|
2.
|
Provided Participants located in Belgium pay tax on a Long-Term Incentive Program (LTIP) Award at grant, the CHRO is authorized to treat up to thirty-four percent (34%) of Award as non-forfeitable on the Grant Date.
|
3.
|
The CHRO may adjust Award Agreements issued to Participants located in the UK to shift the employer tax obligations to Participants, if appropriate.
|
4.
|
The CHRO may adjust other Award Agreements as necessary to comply with the terms set out in foreign sub-plans adopted by the Committee.
|
VIII.
|
MISCELLANEOUS
|
1.
|
Determination by the Committee as to the interpretation of the terms and provisions of the2014 Plan shall be conclusive on all interested parties.
|
2.
|
In case of a triggering event under Article 4 of the 2014 Plan the appropriate number of such new or additional or different shares or securities will be issued by the Treasurer with the applicable restrictive legend to recipients holding restricted shares, in accordance with each Award Agreement.
|
3.
|
These Regulations may be amended at any time by action of the Committee.
|
(a)
|
a body corporate that is a related body corporate of the Company;
|
(b)
|
a body corporate that has voting power in the Company of not less than 20%; or
|
(c)
|
a body corporate in which the Company has voting power of not less than 20%;
|
4.
|
Eligible Participants
|
(a)
|
the number of shares of Common Stock in the same class which would be issued were each outstanding offer of shares of Common Stock or Option to acquire unissued shares of Common Stock under the Plan or any other employee share scheme of the Company, accepted or exercised (as the case may be); and
|
(b)
|
the number of shares of Common Stock in the same class issued during the previous five years pursuant to the Plan or any other employee share scheme extended only to full or part-time employees or directors of the Company or of any Associated Body Corporate of the Company;
|
(c)
|
an offer to a person situated at the time of receipt of the offer outside Australia;
|
(d)
|
an offer that was an excluded offer or invitation within the meaning of the Corporations Law as it stood prior to 13 March 2000;
|
(e)
|
an offer that did not require disclosure to investors because of section 708 of the Corporations Act 2001 (Cth);
|
(f)
|
an offer that did not require the giving of a Product Disclosure Statement because of section 1012D of the Corporations Act 2001 (Cth); or
|
(g)
|
an offer made under a disclosure document or a Product Disclosure Statement,
|
a.
|
with respect to Purchase Options over Common Stock, the higher of either 80% of the average opening price of such Common Stock during the 20 days of quotation immediately preceding the Effective Grant Date or 80% of the average purchase price paid for such Common Stock by the Company;
|
b.
|
with respect to Subscription Options over the Common Stock, 80% of the average opening price of such Common Stock during the 20 days of quotation immediately preceding the Effective Grant Date; and
|
c.
|
the minimum Option Price permitted under the U.S. Plan.
|
3.
|
Payment of the Option Price
|
|
Acquiring Company
|
a company which obtains Control of the Company in the circumstances referred to in rule 26;
|
|
|
Associated Company
|
the meaning given to that expression by paragraph 35(1) of Schedule 4;
|
|
|
Close Company
|
the meaning given to that expression by section 989 of the Income Tax Act 2007, and paragraph 9(4) of Schedule 4;
|
|
|
Committee
|
the Compensation & Leadership Development Committee of the Board or such other committee as may be designated by the Board to administer the Plan;
|
|
|
Consortium
|
the meaning given to that word by paragraph 36(2) of Schedule 4;
|
|
|
Constituent Company
|
means the Company or a company which is:
(a) a Subsidiary or
(b) a Jointly Owned Company where neither it nor any company Controlled by it is a constituent company under the provisions of paragraph 34(4) of Schedule 4 in any other CSOP scheme as that term is defined in paragraph 2 of Schedule 4;
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|
|
Control
|
the meaning given to that word by section 719 of ITEPA 2003 and “Controlled” shall be construed accordingly;
|
|
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Date of Grant
|
the date on which an Option is granted to an Eligible Employee in accordance with the Articles of the Plan;
|
|
|
Eligible Employee
|
an individual who falls within the provisions of Article 5 of the Plan and who is:
(a) an employee (other than a director) of a Constituent Company; or
(b) a director of a Constituent Company who is contracted to work at least 25 hours per week for the Company and its subsidiaries or any of them (exclusive of meal breaks)
and who, in either case:
(i) is not eligible solely by reason that he is a non-executive director of a Constituent Company;
(ii) has earnings in respect of his office or employment which are (or would be if there were any) general earnings to which sections 15, 22 or 26 of ITEPA 2003 applies; and
(iii) does not have at the Date of Grant, and has not had during the preceding twelve months, a Material Interest in a Close Company which is the Company or a company which has Control of the Company or a member of a Consortium which owns the Company;
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|
|
ITEPA 2003
|
means the Income Tax (Earnings and
Pensions) Act 2003;
|
|
|
Market Value
|
notwithstanding Article 7.2 of the Plan,
(a) in the case of an Option granted under the Sub-Plan:
(i) if at the relevant time the Shares are listed on the New York Stock Exchange, the average of the highest and lowest sale prices of a Share on the Date of Grant (as quoted in the Wall Street Journal) or, if there were no trades on that day, on the dealing day immediately preceding the Date of Grant;
(ii) if paragraph (i) above does not apply, the market value of a Share as determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992 and agreed in advance with HM Revenue & Customs Shares and Assets Valuation on the Date of Grant or such earlier date or dates (not being more than thirty days before the Date of Grant) as may be agreed with HM Revenue & Customs;
provided that the Market Value of Shares subject to a Relevant Restriction shall be determined as if they were not subject to a Relevant Restriction;
(b) in the case of an option granted under any other share option scheme, the market value of a Share shall be determined under the rules of such scheme for the purpose of the grant of the option;
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|
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Material Interest
|
the meaning given to that expression by paragraphs 9 to 14 of Schedule 4;
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|
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New Option
|
an option granted by way of exchange under rule 26.1;
|
|
|
New Shares
|
the shares subject to a New Option as set out in rule 26;
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|
|
Option
|
a right to acquire Shares granted under the Sub-Plan;
|
|
|
Option Holder
|
an individual who holds an Option or, where the context permits, his legal personal representatives;
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|
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Relevant Restriction
|
any provision in any contract, agreement, arrangement or condition to which any of sub-sections (2) to (4) of section 423 of ITEPA 2003 would apply if references in those sub-sections to employment-related securities were references to the Shares;
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|
|
Schedule 4
|
means Schedule 4 to ITEPA 2003;
|
|
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Schedule 4 CSOP
|
a share plan that meets the requirements of Schedule 4;
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|
|
Shares
|
common stock of the Company as defined in Article 2.42 of the Plan; and
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|
|
Subsidiary
|
means a company which is a subsidiary of the Company within the meaning of section 1159 of the Companies Act 2006 over which the Company has Control.
|
|
•
|
words and expressions not defined above have the same meanings as are given to them in the Plan;
|
•
|
the contents and rule headings are inserted for ease of reference only and do not affect their interpretation;
|
•
|
a reference to a rule is a reference to a rule in this Sub-Plan; and
|
•
|
a reference to a statutory provision is a reference to a United Kingdom statutory provision and includes any statutory modification, amendment or re-enactment thereof.
|
11.1
|
An Award Agreement issued in respect of an Option shall state:
|
•
|
that it is issued in respect of an Option;
|
•
|
the date of grant of the Option;
|
•
|
the number of Shares subject to the Option (or how that number may be calculated);
|
•
|
the exercise price under the Option (or the method by which the exercise price will be determined);
|
•
|
any performance target or other condition imposed on the exercise of the Option;
|
•
|
the times at which the Option will ordinarily be exercisable;
|
•
|
the circumstances in which the Option will lapse;
|
•
|
details of any Relevant Restriction to which the Shares are subject; and
|
•
|
any conditions imposed by the Committee under Articles 3.2 or 16 in relation to the Option.
|
11.2
|
Notwithstanding Article 2.3 of the Plan, an Option granted under this Sub-Plan shall include the terms on vesting and exercise of Options under the heading “Vesting and Exercise” in the form of Award Agreement appended to this schedule, or such other terms as to vesting and exercise at the Vest Date (as defined in the appended form of Award Agreement) or on Termination of Employment, as determined by the Committee, that comply with the requirements of Schedule 4.
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19.1
|
objective;
|
19.2
|
capable of being fulfilled within the period of ten years from the Date of Grant;
|
19.3
|
such that, once satisfied, the exercise of the Option is not subject to the discretion of any person; and
|
19.4
|
stated in the Award Agreement.
|
19.5
|
be reasonable in the circumstances; and
|
19.6
|
except in the case of waiver produces a fairer measure of performance and is not materially more or less difficult to satisfy.
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23.1
|
the listing of the Shares on any stock exchange on which Shares are then listed; or
|
23.2
|
such registration or other qualification of the Shares under any applicable law, rule or regulation as the Company determines is necessary or desirable.
|
26.1
|
Exchange of Options
|
26.1.1
|
a general offer to acquire the whole of the issued ordinary share capital of the Company which is made on a condition such that if it is satisfied the person making the offer will have Control of the Company;
|
26.1.2
|
a general offer to acquire all the shares in the Company of the same class as the Shares:
|
26.1.3
|
a compromise or arrangement sanctioned by the court under section 899 of the Companies Act 2006; or
|
26.1.4
|
a “non-UK company reorganisation arrangement” (within the meaning of paragraph 35ZA of Schedule 4); or
|
26.1.5
|
should an Acquiring Company become bound or entitled to acquire Shares under sections 979 to 982 of the Companies Act 2006,
|
26.2
|
Period allowed for exchange of Options
|
26.2.1
|
for events in rules 26.1.1 to 26.1.4 (inclusive), the period of six months beginning with the time when the person making the offer has obtained Control of the Company and any condition subject to which the offer is made has been satisfied; and
|
26.2.2
|
for the event in rule 26.1.5, the period during which the Acquiring Company remains bound or entitled to acquire Shares under sections 979 to 982 of the Companies Act 2006.
|
26.3
|
Meaning of “equivalent”
|
26.3.1
|
the New Shares satisfy the conditions in paragraphs 16 to 20 of Schedule 4; and
|
26.3.2
|
save for any performance target or other performance condition imposed on the exercise of the Option pursuant to rule 19, the New Option is exercisable in the same manner as the Option and subject to the provisions of the Sub-Plan as it had effect immediately before the release of the Option; and
|
26.3.3
|
the total market value, immediately before the release of the Option, of the Shares which were subject to the Option is substantially the same as the total market value, immediately after the grant of the New Option, of the New Shares subject to the New Option (market value being determined using a methodology agreed by HM Revenue & Customs);
|
26.3.4
|
the total amount payable by the Option Holder for the acquisition of the New Shares under the New Option is substantially the same as the total amount that would have been payable by the Option Holder for the acquisition of the Shares under the Option.
|
26.4
|
Date of grant of New Option
|
26.5
|
Application of Sub-Plan to New Option
|
•
|
Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Stock Units, Other Stock-Based Awards and Cash-Based Awards;
|
•
|
the cash cancellation of share options including those contained in Article 17.3(a)(i) of the Plan; and
|
•
|
the granting of Options in tandem with Stock Appreciation Rights and the subsequent cancellation of Options
|
Employment Separation Date:
|
Your last day of employment with P&G will be [ ], which will be your “Employment Separation Date” for purposes of this letter.
|
Vacation:
|
You will receive payment for your accrued but unused vacation as of your Employment Separation Date, which sum will be paid to you in accordance with P&G policy and applicable laws. You will not accrue any additional vacation following your Employment Separation Date.
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STAR Award:
|
As of your Employment Separation Date, if you were otherwise eligible for a STAR award and you worked at least 28 days (4 calendar weeks) during the fiscal year, you will receive a pro-rated STAR award for the fiscal year. Your STAR award will be pro-rated by dividing the number of calendar days during the fiscal year from July 1 through your Employment Separation Date by 365. Your STAR award will be paid in cash in the September (but no later than September 15th) immediately following the end of the fiscal year in which your employment terminates with P&G.
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Separation Payment
[Optional]:
|
P&G will, within thirty (30) calendar days after your Employment Separation Date, provide you with a separation payment in the amount of $[ ] (“Separation Payment”) (representing [ ] weeks of pay at your current salary), less applicable state and federal withholdings and deductions, which sum will be paid in one lump sum payment. The Separation Payment will be the only assistance P&G provides upon your separation. Other resources may be available to you as a participant in general compensation and benefit plans, which it will be your responsibility to identify and make any necessary arrangements upon separation.
Amounts you owe to P&G as of your Employment Separation Date, including, but not limited to, wage and/or benefit overpayments and unpaid loans, will also be deducted from the Separation Payment.
|
Unemployment Compensation Benefits [Optional]:
|
Your Separation Payment will be allocated to the [ #] week period following your Employment Separation Date.
|
Special Retirement (“Rule of 70”) [Optional]:
|
P&G will agree to allow the “Rule of 70” to apply to you, but only for purposes of eligibility for retiree health care benefits under the Procter & Gamble Retiree Welfare Benefits Plan. The Rule of 70 is a special eligibility rule for retiree health care coverage (including medical, dental, and prescription drug benefits) under the Procter & Gamble Retiree Welfare Benefits Plan that only applies in specific circumstances. The Rule of 70 will apply to you with respect to health care coverage under the Procter & Gamble Retiree Welfare Benefits Plan as long as that Plan continues to exist and as long as the Rule of 70 continues as an eligibility rule for coverage under that Plan.
For purposes of this paragraph only, the parties agree that your employment with P&G ended on [ ], and that you were not terminated for cause. The parties also agree that at the time your employment with the Company ended, you were [ ] years old and had [ ] years of service with the Company, making your full years of age plus full years of service [ ], which is greater than 70.
To avoid confusion, other than establishing that the Rule of 70 applies to you for purposes of retiree health care coverage under the Procter & Gamble Welfare Benefits Plan, you are subject to the same terms and conditions of the Procter & Gamble Welfare Benefits Plan, including but not limited to (1) coverage does not begin until you enrolls in the Plan, and once enrolled coverage is only prospective, (2) the monthly premiums required for coverage under the Plan must be paid on time to avoid coverage from terminating, (3) you will become ineligible for coverage under the Plan while you are employed by a direct competitor of P&G (as determined by P&G’s Chief Human Resources Officer) in an officer and/or director capacity (if you were at Band 5 or below at the time your employment with the Company ended) or in any capacity (if you were at Band 6 or above at the time your employment with the Company ended), and (4) the Company’s reservation of amendment and termination rights with respect to the Plan.
|
Retention of Vested & Unvested Equity Awards [Optional]:
|
Your separation will be treated as a Special Separation for purposes of any outstanding equity awards granted under the Procter & Gamble 2009 Stock and Incentive Compensation Plan, the Procter & Gamble 2001 Stock and Incentive Compensation Plan, the Procter & Gamble 1992 Stock Plan, or the Gillette Company 2004 Long-Term Incentive Plan and, as a result, you will retain the awards subject to the original terms and conditions of the awards. You will also retain awards granted under the Procter & Gamble 2014 Stock & Incentive Compensation Plan subject to the terms and conditions of those Awards.
This Separation Letter & Release does not alter the rights and obligations that you may have under 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 the Gillette Company 2004 Long-Term Incentive Plan.
|
Release of Claims - Including Employment Claims:
|
You hereby release P&G from any and all claims or rights you may have against P&G. The term “P&G” includes The Procter & Gamble Company and any of its present, former and future owners, parents, affiliates and subsidiaries, and its and their directors, officers, shareholders, employees, agents, benefit plans, trustees, fiduciaries, servants, representatives, predecessors, successors and assigns. This release applies to claims about which you now know or may later discover, and includes but is not limited to: (1) claims arising under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621, et seq.; (2) claims arising under any other federal, state or local law, regulation or ordinance or other order that regulates the employment relationship and/or employee benefits; and (3) claims arising out of or relating in any way to your employment with P&G or the conclusion of that employment. This release does not apply to claims that may arise after the date you sign this letter or that may not be released under applicable law.
Governmental Agencies: Nothing in this Separation Letter & Release prohibits or prevents you from filing a charge with or participating, testifying, or assisting in any investigation, hearing, or other proceeding before the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board or a similar agency enforcing federal, state or local anti-discrimination laws. However, to the maximum extent permitted by law, you agree that if such an administrative claim is made to such an anti-discrimination agency, you shall not be entitled to recover any individual monetary relief or other individual remedies. Nothing in this Separation Letter & Release prohibits you from: (1) reporting possible violations of federal law or regulations, including any possible securities laws violations, to any governmental agency or entity, including but not limited to the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the U.S. Congress, or any agency Inspector General; (2) making any other disclosures that are protected under the whistleblower provisions of federal law or regulations; or (3) otherwise fully participating in any federal whistleblower programs, including but not limited to any such programs managed by the U.S. Securities and Exchange Commission and/or the Occupational Safety and Health Administration. You understand you do not need the prior authorization from the Company to make any such reports or disclosures, and you are not required to notify the Company that you have made such reports or disclosures. Moreover, nothing in this Separation Letter & Release prohibits or prevents you from receiving individual monetary awards or other individual relief by virtue of participating in such federal whistleblower programs.
|
Return of P&G Property:
|
You agree that by your Employment Separation Date, 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, phones, iPads, tablets 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 Employment Separation Date.
|
No Other Agreements:
|
Except as specifically set forth in this Paragraph (“No Other Agreements”), this letter supersedes any prior written or oral agreements between P&G and you concerning the termination of your employment and any benefits you might receive following that event. This letter is neither a Negotiated Separation Agreement under the Procter & Gamble Basic Separation Program nor an agreement under any other separation program or plan sponsored by The Procter & Gamble Company or any of its subsidiaries. This letter does not alter your rights and obligations under the terms of the P&G Profit Sharing and Employee Stock Ownership Plan, other retirement plans, the P&G Stock and Incentive Compensation Plan, and other compensation plans.
|
(1)
|
I have reviewed this quarterly report on Form 10-Q of The Procter & Gamble Company;
|
(2)
|
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;
|
(3)
|
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;
|
(4)
|
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:
|
a)
|
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;
|
b)
|
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;
|
c)
|
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;
|
d)
|
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
|
(5)
|
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):
|
a)
|
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
|
b)
|
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.
|
/s/ DAVID S. TAYLOR
|
(David S. Taylor)
|
Chairman of the Board, President and Chief Executive Officer
|
|
January 23, 2018
|
Date
|
(1)
|
I have reviewed this quarterly report on Form 10-Q of The Procter & Gamble Company;
|
(2)
|
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;
|
(3)
|
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;
|
(4)
|
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:
|
a)
|
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;
|
b)
|
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;
|
c)
|
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;
|
d)
|
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
|
(5)
|
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):
|
a)
|
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
|
b)
|
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.
|
/s/ JON R. MOELLER
|
(Jon R. Moeller)
|
Vice Chairman and Chief Financial Officer
|
|
January 23, 2018
|
Date
|
(1)
|
The Quarterly Report on Form 10-Q of the Company for the quarterly period ended December 31, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in that Form 10-Q fairly presents, in all material respects, the financial conditions and results of operations of the Company.
|
/s/ DAVID S. TAYLOR
|
(David S. Taylor)
|
Chairman of the Board, President and Chief Executive Officer
|
|
January 23, 2018
|
Date
|
(1)
|
The Quarterly Report on Form 10-Q of the Company for the quarterly period ended December 31, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in that Form 10-Q fairly presents, in all material respects, the financial conditions and results of operations of the Company.
|
/s/ JON R. MOELLER
|
(Jon R. Moeller)
|
Vice Chairman and Chief Financial Officer
|
|
January 23, 2018
|
Date
|