P&G Announces Third Quarter Fiscal 2016 Results

Organic Sales +1%; Net Sales -7%; Diluted Net
EPS $0.97,+29%;

Core EPS $0.86, -3%; Currency-Neutral Core EPS
Unchanged Versus Prior Year

CINCINNATI–(BUSINESS WIRE)–The Procter & Gamble Company (NYSE:PG) reported third quarter fiscal
year 2016 diluted net earnings per share of $0.97, an increase of 29%.
Core earnings per share were $0.86, a decrease of three percent, while
currency-neutral core earnings per share were unchanged versus the prior
year. Core operating profit margin increased 300 basis points driven
primarily by productivity savings in gross margin. Net sales were $15.8
billion, a decrease of seven percent versus the prior year including a
five percent negative impact from foreign exchange, a two percent impact
from the Venezuela deconsolidation and a one percent impact from minor
brand divestitures. Organic sales grew one percent.

Operating cash flow was $3.3 billion for the quarter. Adjusted free cash
flow productivity was 105%. The Company repurchased $1.0 billion of
common stock and returned $1.9 billion of cash to shareholders as
dividends. Additionally, the Company acquired $4.2 billion of common
stock with the closing of the Duracell transaction.

“We continue to make progress on the transformations we are undertaking
to return P&G to balanced top and bottom-line growth and maintain strong
cash generation,” said President and Chief Executive Officer David
Taylor. “We achieved a significant milestone this quarter in the
transformation of the product portfolio with the sale of the Duracell
business. We delivered another strong quarter of productivity
improvement and cost savings, and we increased investments in
innovation, advertising and selling to enhance our long-term prospects
for faster, sustainable top-line growth and value creation.”

January – March Quarter Discussion

Net sales in the third quarter of fiscal year 2016 were $15.8 billion, a
seven percent decrease, including a negative five percentage point
impact from foreign exchange and three percentage point impact from the
combination of the Venezuela deconsolidation and minor brand
divestitures. Organic sales increased one percent on organic shipment
volume that was unchanged versus the prior year. Pricing increased total
net sales by one percent. All-in volume declined two percent due to the
Venezuela deconsolidation and minor brand divestitures.

                                         

January – March 2016

   

Foreign

                 

Organic

 

Organic

Net Sales Drivers*

Volume

Exchange

Price

Mix

Other**

Net Sales

Volume

Sales

Beauty (5)% (5)% 2% —% —% (8)% (1)% 1%
Grooming (6)% (7)% 5% (1)% (1)% (10)% (5)% (1)%
Health Care (3)% (5)% 1% —% —% (7)% (2)% (1)%
Fabric Care and Home Care —% (5)% 1% —% —% (4)% 2% 3%
Baby, Feminine and Family Care   (2)%   (5)%   —%   —%   (1)%   (8)%           (1)%   —%
Total P&G   (2)%   (5)%   1%   —%   (1)%   (7)%           —%   1%

* Net sales percentage changes are approximations based on quantitative
formulas that are consistently applied.
** Other includes the sales
mix impact of acquisitions/divestitures, the Venezuela deconsolidation
and rounding impacts necessary to reconcile volume to net sales.

Sales in four of the five business segments benefited from price
increases taken with new product innovations and/or to offset the impact
of currency devaluation in markets such as Russia, Brazil and Mexico.
Volume declined in four of the five business segments due to lower
shipments in developing markets, including the impact of the Venezuela
deconsolidation and minor brand divestitures. The following business
segment discussion includes other impacts to sales growth in addition to
those mentioned above:

  • Beauty segment organic sales grew one percent versus year ago as
    positive impacts from pricing more than offset lower organic volume.
    Organic sales increases in Personal Care and the super-premium SK-II
    skin care brand were partially offset by organic sales declines of the
    Olay brand. Hair Care organic sales were unchanged as growth on
    Pantene and Head & Shoulders was offset by declines on other brands.
    In the U.S. both Pantene and Head & Shoulders gained market share.
  • Grooming segment organic sales decreased one percent as growth in
    international markets was more than offset by declines in the U.S. The
    benefits from higher pricing in Shave Care and Appliances were more
    than offset by unit volume declines.
  • Health Care segment organic sales decreased one percent as higher
    pricing in both Oral Care and Personal Health Care was more than
    offset by lower volume primarily related to a weak cough and cold
    season.
  • Fabric Care and Home Care segment organic sales increased three
    percent versus year ago driven by higher organic volume in developed
    regions and increased pricing. Home Care organic sales growth was
    driven by product innovation and Fabric Care organic sales grew behind
    innovation and increased marketing support.
  • Baby, Feminine and Family Care segment organic sales were unchanged.
    Baby Care organic sales declined due to lower volume, mainly from
    competitive activity. Feminine Care organic sales increased driven by
    growth in adult incontinence and benefits from carryover pricing in
    developing markets. Family Care organic sales were unchanged.

Core earnings per share were $0.86, a decrease of three percent versus
the prior year. Excluding the impact of foreign exchange,
currency-neutral core earnings per share were unchanged for the quarter.
Diluted net earnings per share from continuing operations decreased one
percent to $0.81. Diluted net earnings per share were $0.97, an increase
of 29% versus the prior year, driven by impacts from discontinued
operations, primarily from base period impairment charges related to the
Batteries business and a current year gain on the sale of the business,
which closed on February 29, 2016.

Reported gross margin increased 250 basis points. Excluding the impact
of incremental restructuring charges, core gross margin improved 270
basis points, including 70 basis points of negative foreign exchange
impacts. On a currency-neutral basis, core gross margin increased 340
basis points, driven by 230 basis points of productivity cost savings,
130 basis points from lower commodity costs and a 60 basis point benefit
from pricing, partially offset by unfavorable geographic and product mix
and by negative scale leveraging due to lower volume.

Selling, general and administrative expense (SG&A) as a percentage of
sales decreased 70 basis points on a reported basis versus the prior
year, including a 50 basis point benefit due to lower restructuring
charges. Core SG&A as a percentage of sales decreased 20 basis points,
including a 100 basis point net benefit from foreign exchange impacts,
driven by lower foreign currency re-measurement charges. On a
currency-neutral basis, core SG&A increased 80 basis points versus the
prior year driven by increased advertising, partially offset by a
benefit from overhead spending reductions due to productivity efforts.

Reported operating profit margin increased 320 basis points and core
operating profit margin was up 300 basis points versus the prior year,
including a net 30 basis points benefit from foreign exchange impacts,
driven by lower foreign currency re-measurement charges. On a
currency-neutral basis, core operating profit margin increased 270 basis
points, including 290 basis points of productivity cost savings.

Fiscal Year 2016 Guidance

P&G said it is maintaining its outlook for organic sales growth of
in-line to up low-single digits versus fiscal 2015. The Company expects
all-in sales to be down high-single digits in fiscal 2016, including a
negative six to seven percentage point impact from foreign exchange and
a two to three percentage point drag from the combined impacts of the
Venezuela deconsolidation and minor brand divestitures.

With one quarter remaining in its fiscal year, the Company said it is
tightening its outlook for Core EPS to a range of down three percent to
six percent versus last year’s Core EPS of $3.76. P&G said it continues
to expect constant-currency Core EPS growth in the mid-single digits.
The Company continues to expect foreign exchange to have about a nine
percentage point, or negative $0.35 per share, impact on Core EPS growth
for the year. All-in GAAP earnings per share are expected to be up in
the range of 46% to 51% versus the prior year.

P&G noted that fourth quarter Core EPS is expected to be significantly
lower than prior year due to a combination of increased advertising
investments, a higher tax rate, headwinds from foreign exchange and
lower non-operating income.

The Company expects to repurchase and exchange shares at a value of more
than $8 billion through a combination of direct share repurchases and
shares that were exchanged in the Duracell transaction. In addition, P&G
expects to pay dividends of more than $7 billion, for a total of over
$15 billion in dividend payments, share repurchases and share exchanges
this fiscal year.

Forward-Looking Statements

Certain statements in this report, other than purely historical
information, including estimates, projections, statements relating to
our business plans, objectives, and expected operating results, and the
assumptions upon which those statements are based, are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words
“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,”
“would,” “will be,” “will continue,” “will likely result,” and similar
expressions. Forward-looking statements are based on current
expectations and assumptions, which are subject to risks and
uncertainties that may cause results to differ materially from those
expressed or implied in the forward-looking statements. We undertake no
obligation to update or revise publicly any forward-looking statements,
whether because of new information, future events or otherwise.

Risks and uncertainties to which our forward-looking statements are
subject include, without limitation: (1) the ability to successfully
manage global financial risks, including foreign currency fluctuations,
currency exchange or pricing controls and localized volatility; (2) the
ability to successfully manage local, regional or global economic
volatility, including disruptions in credit markets, reduced market
growth rates or changes affecting our credit rating, and generate
sufficient income and cash flow to allow the Company to effect the
expected share repurchases and dividend payments; (3) the ability to
maintain key manufacturing and supply arrangements (including sole
supplier and sole manufacturing plant arrangements) and manage
disruption of business due to factors outside of our control, such as
natural disasters and acts of war or terrorism; (4) the ability to
successfully manage cost fluctuations and pressures, including commodity
prices, raw materials, labor costs, energy costs and pension and health
care costs, and achieve cost savings described in our announced
productivity plan; (5) the ability to stay on the leading edge of
innovation, obtain necessary intellectual property protections and
successfully respond to technological advances attained by, and patents
granted to, competitors; (6) the ability to compete with our local and
global competitors in new and existing sales channels by successfully
responding to competitive factors, including prices, promotional
incentives and trade terms for products; (7) the ability to manage and
maintain key customer relationships; (8) the ability to protect our
reputation and brand equity by successfully managing real or perceived
issues, including concerns about safety, quality, efficacy or similar
matters that may arise; (9) the ability to successfully manage the
financial, legal, reputational and operational risk associated with
third party relationships, such as our suppliers, contractors and
external business partners; (10) the ability to rely on and maintain key
information technology systems and networks (including Company and
third-party systems and networks) and maintain the security and
functionality of such systems and networks and the data contained
therein; (11) the ability to successfully manage regulatory and legal
requirements and matters (including, without limitation, those laws and
regulations involving product liability, intellectual property,
antitrust, privacy, accounting standards and environmental) and to
resolve pending matters within current estimates; (12) the ability to
manage changes in applicable tax laws and regulations; (13) the ability
to successfully manage our portfolio optimization strategy, as well as
ongoing acquisition, divestiture and joint venture activities, to
achieve the Company’s overall business strategy, without impacting the
delivery of base business objectives; and (14) the ability to
successfully achieve productivity improvements and manage ongoing
organizational changes, while successfully identifying, developing and
retaining particularly key employees, especially in key growth markets
where the availability of skilled or experienced employees may be
limited. For additional information concerning factors that could cause
actual results to materially differ from those projected herein, please
refer to our most recent 10-K, 10-Q and 8-K reports.

About Procter & Gamble

P&G serves consumers around the world with one of the strongest
portfolios of trusted, quality, leadership brands, including Always®,
Ambi Pur®, Ariel®, Bounty®, Charmin®, Crest®, Dawn®, Downy®, Fairy®,
Febreze®, Gain®, Gillette®, Head & Shoulders®, Lenor®, Olay®, Oral-B®,
Pampers®, Pantene®, SK-II®, Tide®, Vicks®, and Whisper®. The P&G
community includes operations in approximately 70 countries worldwide.
Please visit http://www.pg.com
for the latest news and information about P&G and its brands.

 
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Consolidated Earnings Information
       
Three Months Ended March 31 Nine Months Ended March 31
2016   2015   % Chg 2016   2015   % Chg
NET SALES $ 15,755 $ 16,930 (7 )% $ 49,197 $ 54,196 (9 )%
COST OF PRODUCTS SOLD 7,915   8,927   (11 )% 24,527   28,219   (13 )%
GROSS PROFIT 7,840 8,003 (2 )% 24,670 25,977 (5 )%
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 4,522   4,978   (9 )% 13,731   15,740   (13 )%
OPERATING INCOME 3,318 3,025 10 % 10,939 10,237 7 %
INTEREST EXPENSE 146 148 (1 )% 429 478 (10 )%
INTEREST INCOME 33 38 (13 )% 135 103 31 %
OTHER NON-OPERATING INCOME, NET 21   53   (60 )% 38   85   (55 )%
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 3,226 2,968 9 % 10,683 9,947 7 %
INCOME TAXES ON CONTINUING OPERATIONS 889   567   57 % 2,664   2,156   24 %
NET EARNINGS FROM CONTINUING OPERATIONS 2,337   2,401   (3 )% 8,019   7,791   3 %
NET EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS 446   (213 ) N/A 627   (1,185 ) N/A
NET EARNINGS 2,783 2,188 27 % 8,646 6,606 31 %
LESS: NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 33   35   (6 )% 89   91   (2 )%
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE $ 2,750   $ 2,153   28 % $ 8,557   $ 6,515   31 %
 
EFFECTIVE TAX RATE 27.6 % 19.1 % 24.9 % 21.7 %
 
BASIC NET EARNINGS PER COMMON SHARE:*
EARNINGS FROM CONTINUING OPERATIONS $ 0.83 $ 0.85 (2 )% $ 2.86 $ 2.77 3 %
EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS $ 0.17 $ (0.08 ) N/A $ 0.23 $ (0.44 ) N/A
BASIC NET EARNINGS PER COMMON SHARE $ 1.00 $ 0.77 30 % $ 3.09 $ 2.33 33 %
DILUTED NET EARNINGS PER COMMON SHARE:*
EARNINGS FROM CONTINUING OPERATIONS $ 0.81 $ 0.82 (1 )% $ 2.78 $ 2.67 4 %
EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS $ 0.16 $ (0.07 ) N/A $ 0.22 $ (0.41 ) N/A
DILUTED NET EARNINGS PER COMMON SHARE $ 0.97 $ 0.75 29 % $ 3.00 $ 2.26 33 %
DIVIDENDS PER COMMON SHARE $ 0.663 $ 0.644 $ 1.989 $ 1.931
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,835.0 2,882.5 2,855.6 2,885.3
 

COMPARISONS AS A % OF NET SALES

Basis Pt
Chg

Basis Pt
Chg

GROSS MARGIN 49.8% 47.3% 250 50.1% 47.9% 220
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 28.7% 29.4% (70) 27.9% 29.0% (110)
OPERATING MARGIN 21.1% 17.9% 320 22.2% 18.9% 330
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 20.5% 17.5% 300 21.7% 18.4% 330
NET EARNINGS FROM CONTINUING OPERATIONS 14.8% 14.2% 60 16.3% 14.4% 190
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE 17.5% 12.7% 480 17.4% 12.0% 540

* Basic net earnings per common share and diluted net earnings per
common share are calculated on net earnings attributable to Procter &
Gamble.

 
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Earnings Information
   
Three Months Ended March 31, 2016
    Earnings/(Loss)      
from Continuing Net
% Change Operations % Change Earnings/(Loss) % Change
Versus Before Income Versus from Continuing Versus
Net Sales   Year Ago   Taxes   Year Ago   Operations   Year Ago
Beauty $ 2,719 (8 )% $ 604 (6 )% $ 458 (5 )%
Grooming 1,623 (10 )% 469 (22 )% 356 (22 )%
Health Care 1,773 (7 )% 414 (10 )% 278 (8 )%
Fabric Care and Home Care 5,028 (4 )% 1,014 8 % 652 10 %
Baby, Feminine and Family Care 4,506 (8 )% 976 (3 )% 631 (9 )%
Corporate 106 N/A (251 ) N/A (38 ) N/A
Total Company $ 15,755 (7 )% $ 3,226   9 % $ 2,337   (3 )%
   
Three Months Ended March 31, 2016
(Percent Change vs. Year Ago)*
  Volume          
Volume with Excluding
Acquisitions & Acquisitions & Foreign Net Sales
Divestitures   Divestitures   Exchange   Price   Mix   Other**   Growth
Beauty (5)% (1)% (5)% 2% —% —% (8)%
Grooming (6)% (5)% (7)% 5% (1)% (1)% (10)%
Health Care (3)% (2)% (5)% 1% —% —% (7)%
Fabric Care and Home Care —% 2% (5)% 1% —% —% (4)%
Baby, Feminine and Family Care (2)%   (1)%   (5)%   —%   —%   (1)%   (8)%
Total Company (2)%   —%   (5)%   1%   —%   (1)%   (7)%
   
Nine Months Ended March 31, 2016
    Earnings/(Loss)      
from Continuing Net
% Change Operations % Change Earnings/(Loss) % Change
Versus Before Income Versus from Continuing Versus
Net Sales   Year Ago   Taxes   Year Ago   Operations   Year Ago
Beauty $ 8,723 (10 )% $ 2,200 (4 )% $ 1,667 (3 )%
Grooming 5,103 (11 )% 1,547 (20 )% 1,187 (19 )%
Health Care 5,547 (8 )% 1,426 (1 )% 990 %
Fabric Care and Home Care 15,626 (8 )% 3,311 7 % 2,172 8 %
Baby, Feminine and Family Care 13,874 (10 )% 3,124 (6 )% 2,063 (9 )%
Corporate 324   N/A (925 ) N/A (60 ) N/A
Total Company $ 49,197   (9 )% $ 10,683   7 % $ 8,019   3 %
   
Nine Months Ended March 31, 2016
(Percent Change vs. Year Ago)*
  Volume          
Volume with Excluding
Acquisitions & Acquisitions & Foreign Net Sales
Divestitures   Divestitures   Exchange   Price   Mix   Other**   Growth
Beauty (6)% (3)% (7)% 2% 1% —% (10)%
Grooming (4)% (3)% (11)% 5% (2)% 1% (11)%
Health Care (4)% (4)% (7)% 2% 2% (1)% (8)%
Fabric Care and Home Care (1)% —% (7)% 1% —% (1)% (8)%
Baby, Feminine and Family Care (4)%   (3)%   (7)%   1%   —%   —%   (10)%
Total Company (4)%   (2)%   (7)%   2%   —%   —%   (9)%

* Sales percentage changes are approximations based on quantitative
formulas that are consistently applied.
** Other includes the sales
mix impact of acquisitions/divestitures and rounding impacts necessary
to reconcile volume to net sales.

 
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

(Amounts in Millions Except Per Share Amounts)

Consolidated Statements of Cash Flows
   
Nine Months Ended March 31
2016   2015
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 6,836 $ 8,558
OPERATING ACTIVITIES
NET EARNINGS 8,646 6,606
DEPRECIATION AND AMORTIZATION 2,239 2,326
SHARE-BASED COMPENSATION EXPENSE 216 231
DEFERRED INCOME TAXES (428 ) (135 )
LOSS/(GAIN) ON SALE OF BUSINESSES 241 (319 )
GOODWILL AND INTANGIBLE ASSET IMPAIRMENT CHARGES 450 2,021
CHANGES IN:
ACCOUNTS RECEIVABLE (129 ) 308
INVENTORIES (94 ) (190 )
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES (199 ) 146
OTHER OPERATING ASSETS & LIABILITIES 167 (823 )
OTHER 187   449  
TOTAL OPERATING ACTIVITIES 11,296   10,620  
INVESTING ACTIVITIES
CAPITAL EXPENDITURES (2,023 ) (2,462 )
PROCEEDS FROM ASSET SALES 114 3,715
ACQUISITIONS, NET OF CASH ACQUIRED (186 ) (119 )
PURCHASES OF SHORT-TERM INVESTMENTS (2,372 ) (2,897 )
PROCEEDS FROM SALES OF SHORT-TERM INVESTMENTS 1,222 256
CASH TRANSFERRED IN BATTERIES DIVESTITURE (143 )
RESTRICTED CASH RELATED TO BEAUTY BRANDS DIVESTITURE (995 )
CHANGE IN OTHER INVESTMENTS   (203 )
TOTAL INVESTING ACTIVITIES (4,383 ) (1,710 )
FINANCING ACTIVITIES
DIVIDENDS TO SHAREHOLDERS (5,589 ) (5,416 )
CHANGE IN SHORT-TERM DEBT 1,535 (141 )
ADDITIONS TO LONG-TERM DEBT 3,916 1,188
REDUCTIONS OF LONG-TERM DEBT (2,210 ) (2,684 )
TREASURY STOCK PURCHASES (3,504 ) (4,254 )
SHARES EXCHANGED IN BATTERIES DIVESTITURE (1,730 )
IMPACT OF STOCK OPTIONS AND OTHER 2,024   2,664  
TOTAL FINANCING ACTIVITIES (5,558 ) (8,643 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (296 ) (451 )
CHANGE IN CASH AND CASH EQUIVALENTS 1,059   (184 )
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,895   $ 8,374  
 
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

(Amounts in Millions Except Per Share Amounts)

Condensed Consolidated Balance Sheets
         
March 31, 2016 June 30, 2015
CASH AND CASH EQUIVALENTS $ 7,895 $ 6,836
AVAILABLE-FOR-SALE INVESTMENTS SECURITIES 5,924 4,767
ACCOUNTS RECEIVABLE 4,591 4,568
INVENTORIES 4,957 4,979
DEFERRED INCOME TAXES 1,189 1,356
PREPAID EXPENSES AND OTHER CURRENT ASSETS 2,733 2,708
ASSETS HELD FOR SALE 7,028 4,432
TOTAL CURRENT ASSETS 34,317 29,646
PROPERTY, PLANT AND EQUIPMENT, NET 19,186 19,655
GOODWILL 44,679 44,622
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET 24,629 25,010
NONCURRENT ASSETS HELD FOR SALE 5,204
OTHER NONCURRENT ASSETS 4,697 5,358
TOTAL ASSETS $ 127,508 $ 129,495
ACCOUNTS PAYABLE $ 7,795 $ 8,138
ACCRUED AND OTHER LIABILITIES 7,652 8,091
LIABILITIES HELD FOR SALE 2,229 1,543
DEBT DUE WITHIN ONE YEAR 13,681 12,018
TOTAL CURRENT LIABILITIES 31,357 29,790
LONG-TERM DEBT 19,134 18,327
DEFERRED INCOME TAXES 9,161 9,179
NONCURRENT LIABILITIES HELD FOR SALE 717
OTHER NONCURRENT LIABILITIES 8,003 8,432
TOTAL LIABILITIES 67,655 66,445
TOTAL SHAREHOLDERS’ EQUITY 59,853 63,050
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 127,508 $ 129,495
 

The Procter & Gamble Company

Exhibit 1: Non-GAAP Measures

In accordance with the SEC’s Regulation G, the following provides
definitions of the non-GAAP measures used in the MD&A and the
reconciliation to the most closely related GAAP measure. We believe that
these measures provide useful perspective of underlying business results
and trends and provide a more comparable measure of year-on-year
results. These measures are also used to evaluate senior management and
are a factor in determining their at-risk compensation. These non-GAAP
measures are not intended to be considered by the user in place of the
related GAAP measure, but rather as supplemental information to more
fully understand our business results. When a non-GAAP measure is used
in MD&A, we have provided the comparable GAAP measure in the discussion.
These non-GAAP measures may not be the same as similar measures used by
other companies due to possible differences in method and in the items
or events being adjusted.

The Core earnings measures included in the following reconciliation
tables refer to the equivalent GAAP measures adjusted as applicable for
the following items:

  • charges for incremental restructuring due to increased focus on
    productivity and cost savings, and
  • charges for European legal matters.

We do not view these items to be part of our sustainable results.

Organic sales growth: Organic sales growth
is a non-GAAP measure of sales growth excluding the impacts of the
Venezuela deconsolidation, acquisitions, divestitures and foreign
exchange from year-over-year comparisons.

Contacts

P&G Media Contacts:
Damon
Jones, 513-983-0190
Jennifer Corso, 513-983-2570
or
P&G
Investor Relations Contact
:
John Chevalier,
513-983-9974

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