| Document and Entity Information | ||
| 9 Months Ended
Mar. 31, 2010 | Mar. 31, 2010
| |
| Document Type | 10-Q | |
| Amendment Flag | false | |
| Document Period End Date | 2010-03-31 | |
| Document Fiscal Year Focus | 2,010 | |
| Document Fiscal Period Focus | Q3 | |
| Trading Symbol | PG | |
| Entity Registrant Name | PROCTER & GAMBLE CO | |
| Entity Central Index Key | 0000080424 | |
| Current Fiscal Year End Date | --06-30 | |
| Entity Filer Category | Large Accelerated Filer | |
| Entity Common Stock, Shares Outstanding | 2,879,904,226 |
| CONSOLIDATED STATEMENTS OF EARNINGS (USD $) | |||||||||||||||||||
| In Millions, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 | 9 Months Ended
Mar. 31, 2010 | 9 Months Ended
Mar. 31, 2009 | |||||||||||||||
| Net Sales | $19,178 | $17,864 | [1] | $60,012 | $58,610 | [1] | |||||||||||||
| Cost of products sold | 9,225 | 9,117 | [1] | 28,359 | 29,474 | [1] | |||||||||||||
| Selling, general and administrative expense | 5,985 | 5,194 | [1] | 18,582 | 17,142 | [1] | |||||||||||||
| Operating Income | 3,968 | 3,553 | [1] | 13,071 | 11,994 | [1] | |||||||||||||
| Interest expense | 223 | 337 | [1] | 734 | 1,030 | [1] | |||||||||||||
| Other non-operating income, net | 17 | 34 | [1] | 93 | 381 | [1] | |||||||||||||
| Earnings from Continuing Operations Before Income Taxes | 3,762 | 3,250 | [1] | 12,430 | 11,345 | [1] | |||||||||||||
| Income taxes | 1,177 | 821 | [1] | 3,669 | 2,988 | [1] | |||||||||||||
| Net Earnings from Continuing Operations | 2,585 | 2,429 | [1] | 8,761 | 8,357 | [1] | |||||||||||||
| Net Earnings from Discontinued Operations | 184 | [1] | 1,790 | 2,608 | [1] | ||||||||||||||
| Net Earnings | $2,585 | $2,613 | [1] | $10,551 | $10,965 | [1] | |||||||||||||
| Per Common Share | |||||||||||||||||||
| Basic net earnings from continuing operations | 0.88 | 0.82 | [1] | 2.96 | 2.77 | [1] | |||||||||||||
| Basic net earnings from discontinued operations | 0.06 | [1] | 0.61 | 0.88 | [1] | ||||||||||||||
| Basic net earnings | 0.88 | 0.88 | [1] | 3.57 | 3.65 | [1] | |||||||||||||
| Diluted net earnings from continuing operations | 0.83 | 0.78 | [1] | 2.82 | 2.64 | [1] | |||||||||||||
| Diluted net earnings from discontinued operations | 0.06 | [1] | 0.57 | 0.82 | [1] | ||||||||||||||
| Diluted net earnings | 0.83 | 0.84 | [1] | 3.39 | 3.46 | [1] | |||||||||||||
| Dividends | 0.44 | 0.4 | [1] | 1.32 | 1.2 | [1] | |||||||||||||
| Diluted Weighted Average Common Shares Outstanding | 3103.9 | 3104.6 | [1] | 3110.2 | 3172.9 | [1] | |||||||||||||
| [1]Certain amounts for prior periods were reclassified to conform with the fiscal 2010 presentation | |||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS (USD $) | ||
| In Millions | Mar. 31, 2010
| Jun. 30, 2009
|
| CURRENT ASSETS | ||
| Cash and cash equivalents | $4,899 | $4,781 |
| Accounts receivable | 5,860 | 5,836 |
| Inventories | ||
| Materials and supplies | 1,716 | 1,557 |
| Work in process | 635 | 672 |
| Finished goods | 4,399 | 4,651 |
| Total inventories | 6,750 | 6,880 |
| Deferred income taxes | 1,231 | 1,209 |
| Prepaid expenses and other current assets | 2,750 | 3,199 |
| TOTAL CURRENT ASSETS | 21,490 | 21,905 |
| PROPERTY, PLANT AND EQUIPMENT | ||
| Buildings | 6,829 | 6,724 |
| Machinery and equipment | 29,780 | 29,042 |
| Land | 849 | 885 |
| Total property, plant and equipment | 37,458 | 36,651 |
| Accumulated depreciation | (18,031) | (17,189) |
| NET PROPERTY, PLANT AND EQUIPMENT | 19,427 | 19,462 |
| GOODWILL AND OTHER INTANGIBLE ASSETS | ||
| Goodwill | 55,538 | 56,512 |
| Trademarks and other intangible assets, net | 32,201 | 32,606 |
| NET GOODWILL AND OTHER INTANGIBLE ASSETS | 87,739 | 89,118 |
| OTHER NON-CURRENT ASSETS | 4,330 | 4,348 |
| TOTAL ASSETS | 132,986 | 134,833 |
| CURRENT LIABILITIES | ||
| Accounts payable | 5,785 | 5,980 |
| Accrued and other liabilities | 10,449 | 8,601 |
| Debt due within one year | 7,038 | 16,320 |
| TOTAL CURRENT LIABILITIES | 23,272 | 30,901 |
| LONG-TERM DEBT | 22,938 | 20,652 |
| DEFERRED INCOME TAXES | 11,407 | 10,752 |
| OTHER NON-CURRENT LIABILITIES | 8,596 | 9,146 |
| TOTAL LIABILITIES | 66,213 | 71,451 |
| SHAREHOLDERS' EQUITY | ||
| Preferred stock | 1,284 | 1,324 |
| Common stock - shares issued - 31-Mar 4,007.5 30-Jun 4,007.3 | 4,007 | 4,007 |
| Additional paid-in capital | 61,536 | 61,118 |
| Reserve for ESOP debt retirement | (1,348) | (1,340) |
| Accumulated other comprehensive income (loss) | (4,049) | (3,358) |
| Treasury stock | (58,879) | (55,961) |
| Retained earnings | 63,879 | 57,309 |
| Noncontrolling interest | 343 | 283 |
| TOTAL SHAREHOLDERS' EQUITY | 66,773 | 63,382 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $132,986 | $134,833 |
| CONSOLIDATED BALANCE SHEETS (Parenthetical) | ||
| Share data in Millions | Mar. 31, 2010
| Jun. 30, 2009
|
| Common stock, shares issued | 4007.5 | 4007.3 |
| CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | |||||||||||||||||||
| In Millions | 9 Months Ended
Mar. 31, 2010 | 9 Months Ended
Mar. 31, 2009 | |||||||||||||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | $4,781 | $3,313 | |||||||||||||||||
| OPERATING ACTIVITIES | |||||||||||||||||||
| Net earnings | 10,551 | 10,965 | [1] | ||||||||||||||||
| Depreciation and amortization | 2,328 | 2,228 | |||||||||||||||||
| Share-based compensation expense | 333 | 368 | |||||||||||||||||
| Deferred income taxes | 187 | 110 | |||||||||||||||||
| Gain on sale of businesses | (2,650) | (2,384) | |||||||||||||||||
| Changes in: | |||||||||||||||||||
| Accounts receivable | (338) | 249 | |||||||||||||||||
| Inventories | (27) | (313) | |||||||||||||||||
| Accounts payable, accrued and other liabilities | 2,198 | (1,013) | |||||||||||||||||
| Other operating assets and liabilities | (43) | (257) | |||||||||||||||||
| Other | 220 | (30) | |||||||||||||||||
| TOTAL OPERATING ACTIVITIES | 12,759 | 9,923 | |||||||||||||||||
| INVESTING ACTIVITIES | |||||||||||||||||||
| Capital expenditures | (1,980) | (2,158) | |||||||||||||||||
| Proceeds from asset sales | 3,047 | 1,096 | |||||||||||||||||
| Acquisitions, net of cash acquired | (65) | (315) | |||||||||||||||||
| Change in investments | (32) | 116 | |||||||||||||||||
| TOTAL INVESTING ACTIVITIES | 970 | (1,261) | |||||||||||||||||
| FINANCING ACTIVITIES | |||||||||||||||||||
| Dividends to shareholders | (4,001) | (3,708) | |||||||||||||||||
| Change in short-term debt | (3,481) | (444) | |||||||||||||||||
| Additions to long-term debt | 2,752 | 4,926 | |||||||||||||||||
| Reductions of long-term debt | (5,922) | (2,190) | |||||||||||||||||
| Treasury stock purchases | (3,417) | (6,365) | |||||||||||||||||
| Impact of stock options and other | 531 | 583 | |||||||||||||||||
| TOTAL FINANCING ACTIVITIES | (13,538) | (7,198) | |||||||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (73) | (343) | |||||||||||||||||
| CHANGE IN CASH AND CASH EQUIVALENTS | 118 | 1,121 | |||||||||||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $4,899 | $4,434 | |||||||||||||||||
| [1]Certain amounts for prior periods were reclassified to conform with the fiscal 2010 presentation | |||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements Disclosure | |
| 9 Months Ended
Mar. 31, 2010 | |
| Organization, Consolidation and Presentation of Financial Statements Disclosure | 1. These statements should be read in conjunction with the Companys Annual Report on Form 10-K for the fiscal year ended June30, 2009, as updated by the Companys Form 8-K filed on January29, 2010. The results of operations for the three-month and nine-month periods ended March31, 2010 are not necessarily indicative of annual results. |
| Comprehensive Income | |
| 9 Months Ended
Mar. 31, 2010 | |
| Comprehensive Income | 2. Comprehensive Income - Total comprehensive income is comprised primarily of net earnings, net currency translation gains and losses, impacts of net investment and cash flow hedges, net unrealized gains and losses on investment securities and defined benefit and other retiree benefit plan activities. Total comprehensive income for the three months ended March31, 2010 and 2009 was $772 million and $504 million, respectively. For the nine months ended March31, 2010 and 2009, total comprehensive income was $9,860 million and $2,896 million, respectively. |
| Segment Information | |
| 9 Months Ended
Mar. 31, 2010 | |
| Segment Information | 3. Segment Information - Effective July1, 2009, we implemented a number of changes to the organization structure of the Beauty GBU, which resulted in changes to the components of our reportable segment structure. Female blades and razors were formerly included in the Grooming reportable segment and are now included in the Beauty reportable segment. Certain male-focused brands and businesses, such as Old Spice and Gillette personal care, moved from the Beauty reportable segment to the Grooming reportable segment. In addition, the Beauty GBU was renamed the Beauty and Grooming GBU. These changes have been reflected in our segment reporting for all periods presented. As discussed in Note 10, certain divested businesses are presented as discontinued operations and are excluded from segment results for all periods presented. Following is a summary of segment results. Three Months Ended March31 Nine Months Ended March31 Amounts in millions Net Sales Earnings from Continuing Operations Before Income Taxes Net Earnings from Continuing Operations Net Sales Earnings from Continuing Operations Before Income Taxes Net Earnings from Continuing Operations Beauty and Grooming GBU Beauty 2010 $ 4,623 $ 772 $ 562 $ 14,761 $ 2,936 $ 2,215 2009 4,371 772 551 14,450 2,844 2,160 Grooming 2010 1,759 462 377 5,712 1,564 1,161 2009 1,591 364 259 5,719 1,524 1,096 Health and Well-Being GBU Health Care 2010 2,805 663 435 8,855 2,283 1,519 2009 2,672 653 415 8,703 2,133 1,413 Snacks and Pet Care 2010 747 124 77 2,337 380 249 2009 764 93 51 2,362 286 169 Household Care GBU Fabric Care and Home Care 2010 5,812 1,168 752 18,253 4,111 2,726 2009 5,381 1,134 726 17,661 3,419 2,210 Baby Care and Family Care 2010 3,768 889 558 11,174 2,699 1,694 2009 3,456 693 423 10,694 2,165 1,355 Corporate 2010 (336 ) (316 ) (176 ) (1,080 ) (1,543 ) (803 ) 2009 (371 ) (459 ) 4 (979 ) (1,026 ) (46 ) Total 2010 19,178 3,762 2,585 60,012 12,430 8,761 2009 17,864 3,250 2,429 58,610 11,345 8,357 |
| Goodwill and Other Intangible Assets | |
| 9 Months Ended
Mar. 31, 2010 | |
| Goodwill and Other Intangible Assets | 4. Goodwill and Other Intangible Assets - Goodwill as of March31, 2010 is allocated by reportable segment and global business unit as follows (amounts in millions): NineMonthsEnded March 31, 2010 BEAUTY GROOMING GBU Beauty, beginning of year $ 18,668 Acquisitions and divestitures 20 Translation and other (448 ) Goodwill, March31, 2010 18,240 Grooming, beginning of year 21,391 Acquisitions and divestitures (24 ) Translation and other (376 ) Goodwill, March31, 2010 20,991 HEALTH WELL-BEING GBU Health Care, beginning of year 8,404 Acquisitions and divestitures (249 ) Translation and other (98 ) Goodwill, March31, 2010 8,057 Snacks and Pet Care, beginning of year 2,055 Acquisitions and divestitures Translation and other (6 ) Goodwill, March31, 2010 2,049 HOUSEHOLD CARE GBU Fabric Care and Home Care, beginning of year 4,408 Acquisitions and divestitures (4 ) Translation and other (67 ) Goodwill, March31, 2010 4,337 Baby Care and Family Care, beginning of year 1,586 Acquisitions and divestitures (1 ) Translation and other (19 ) Goodwill, March31, 2010 1,566 CORPORATE Corporate, beginning of year Acquisitions and divestitures 298 Translation and other Goodwill, March31, 2010 298 GOODWILL, beginning of year 56,512 Acquisitions and divestitures 40 Translation and other (1,014 ) Goodwill, March31, 2010 $ 55,538 The decrease in goodwill from June30, 2009 is primarily due to the divestiture of the Pharmaceuticals business and currency translation, partially offset by the acquisition of MDVIP, a physicians network focused on preventative medicine. Identifiable intangible assets as of March31, 2010 are comprised of (amounts in millions): Gross Carrying Amount Accumulated Amortization Amortizable intangible assets with determinable lives $ 8,651 $ 3,468 Intangible assets with indefinite lives 27,018 Total identifiable intangible assets $ 35,669 $ 3,468 Amortizable intangible assets consist principally of brands, patents, technology and customer relationships. The non-amortizable intangible assets consist primarily of brands. The amortization of intangible assets for the three months ended March31, 2010, and 2009 was $147 million and $149 million, respectively. For the nine months ended March31, 2010 and 2009 the amortization of intangible assets was $435 million and $459 million, respectively. |
| Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | |
| 9 Months Ended
Mar. 31, 2010 | |
| Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | 5. The Company provides awards of equity instruments in exchange for employee services provided. Total share-based compensation for the three months and nine months ended March31, 2010 and 2009 are summarized in the following table (amounts in millions): ThreeMonthsEnded March 31 NineMonthsEnded March 31 2010 2009 2010 2009 Share-Based Compensation Stock options $ 116 $ 131 $ 307 $ 328 Other share-based awards 12 14 26 40 Total share-based compensation $ 128 $ 145 $ 333 $ 368 Assumptions utilized in the model are evaluated and revised, as necessary, to reflect market conditions and experience. |
| Postretirement Benefits | |
| 9 Months Ended
Mar. 31, 2010 | |
| Postretirement Benefits | 6. Postretirement Benefits - The Company offers various postretirement benefits to its employees. The components of net periodic benefit cost are as follows: PensionBenefits OtherRetireeBenefits ThreeMonthsEnded March 31 ThreeMonthsEnded March 31 Amounts in millions 2010 2009 2010 2009 Service cost $ 54 $ 51 $ 26 $ 22 Interest cost 144 130 63 60 Expected return on plan assets (109 ) (111 ) (108 ) (111 ) Amortization of deferred amounts 3 3 (5 ) (5 ) Recognized net actuarial loss 23 7 6 Settlement loss 3 Gross benefit cost (credit) 118 80 (18 ) (34 ) Dividends on ESOP preferred stock (27 ) (25 ) Net periodic benefit cost (credit) $ 118 $ 80 $ (45 ) $ (59 ) Pension Benefits OtherRetireeBenefits NineMonthsEnded March 31 NineMonthsEnded March 31 Amounts in millions 2010 2009 2010 2009 Service cost $ 166 $ 163 $ 78 $ 68 Interest cost 441 418 190 183 Expected return on plan assets (333 ) (360 ) (322 ) (333 ) Amortization of deferred amounts 11 11 (16 ) (17 ) Recognized net actuarial loss 69 21 15 2 Settlement loss 3 Gross benefit cost (credit) 357 253 (55 ) (97 ) Dividends on ESOP preferred stock (83 ) (77 ) Net periodic benefit cost (credit) $ 357 $ 253 $ (138 ) $ (174 ) For the year ending June30, 2010, the expected return on plan assets is 7.1% and 9.3% for pension and other retiree benefit plans, respectively. |
| Risk Management Activities and Fair Value Measurements | |
| 9 Months Ended
Mar. 31, 2010 | |
| Risk Management Activities and Fair Value Measurements | 7. Risk Management Activities and Fair Value Measurements As a multinational company with diverse product offerings, we are exposed to market risks, such as changes in interest rates, currency exchange rates and commodity prices. We evaluate exposures on a centralized basis to take advantage of natural exposure netting and correlation. To the extent we choose to manage volatility associated with the net exposures, we enter into various financial transactions which we account for using the applicable accounting guidance for derivative instruments and hedging activities. These financial transactions are governed by our policies covering acceptable counterparty exposure, instrument types and other hedging practices. At inception, we formally designate and document qualifying instruments as hedges of underlying exposures. We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in either the fair value or cash flows of the related underlying exposure. Fluctuations in the value of these instruments generally are offset by changes in the fair value or cash flows of the underlying exposures being hedged. This offset is driven by the high degree of effectiveness between the exposure being hedged and the hedging instrument. The ineffective portion of a change in the fair value of a qualifying instrument is immediately recognized in earnings. The amount of ineffectiveness recognized is immaterial for all periods presented. For additional details on the Companys risk management activities, refer to the Companys Annual Report on Form 10-K for the fiscal year ended June30, 2009, as updated by the Companys Form 8-K filed on January29, 2010. Fair Value Hierarchy Accounting guidance on fair value measurement for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entitys own assumptions or external inputs from inactive markets. In valuing assets and liabilities, we are required to maximize the use of quoted market prices and minimize the use of unobservable inputs. We calculate the fair value of our Level 1 and Level 2 instruments based on the exchange traded price of similar or identical instruments where available or based on other observable instruments. The fair value of our Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided inputs. These calculations take into consideration the credit risk of both the Company and our counterparties. The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period. The following table sets forth the Companys financial assets and liabilities as of March31, 2010 and June30, 2009 that are measured at fair valu |
| New Accounting Pronouncements and Policies | |
| 9 Months Ended
Mar. 31, 2010 | |
| New Accounting Pronouncements and Policies | 8. New Accounting Pronouncements and Policies In December2007, the Financial Accounting Standards Board (FASB) issued new accounting guidance on business combinations. The new guidance revises the method of accounting for a number of aspects of business combinations including acquisition costs, contingencies (including contingent assets, contingent liabilities and contingent purchase price) and post-acquisition exit activities of acquired businesses. The Company adopted the new guidance beginning July1, 2009, and the adoption of the new guidance did not have a material effect on our financial position, results of operations or cash flows. In December 2007, the FASB also issued new accounting guidance on noncontrolling interests in consolidated financial statements. The new accounting guidance requires that a noncontrolling interest in the equity of a subsidiary be accounted for and reported as equity, provides revised guidance on the treatment of net income and losses attributable to the noncontrolling interest and changes in ownership interests in a subsidiary and requires additional disclosures that identify and distinguish between the interests of the controlling and noncontrolling owners. The Company retrospectively adopted the presentation and disclosure requirements of the new guidance on July1, 2009. The adoption of the new guidance did not have a material effect on our financial position, results of operations or cash flows. Noncontrolling interests of $283 million at June30, 2009 were reclassified from non-current liabilities to shareholders equity in the Consolidated Balance Sheet. Net expense for income attributable to the noncontrolling interest totaling $32 million and $29 million for the three months ended March31, 2010 and 2009, respectively, and $93 million and $61 million for the nine months ended March31, 2010 and 2009, respectively, are not presented separately in the Consolidated Statements of Earnings due to immateriality, but are reflected within other non-operating income, net. Net earnings represent net income attributable to the Companys common shareholders. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on the Consolidated Financial Statements. |
| Commitments and Contingencies | |
| 9 Months Ended
Mar. 31, 2010 | |
| Commitments and Contingencies | 9. Commitments and Contingencies Litigation We are subject to various legal proceedings and claims arising out of our business which cover a wide range of matters such as governmental regulations, antitrust and trade regulations, product liability, patent and trademark matters, income taxes and other actions. As previously disclosed, the Company is subject to a variety of investigations into potential competition law violations in Europe, as detailed in Part 2, Item1, Legal Proceedings of this 10-Q. We believe these matters involve a number of other consumer products companies and/or retail customers. The Companys policy is to comply with all laws and regulations, including all antitrust and competition laws, and to cooperate with investigations by relevant regulatory authorities, which the Company is doing. Competition and antitrust law inquiries often continue for several years and, if violations are found, can result in substantial fines. In response to the actions of the European Commission and national authorities, the Company launched its own internal investigations into potential violations of competition laws. The Company has identified violations in certain European countries and appropriate actions were taken. Three countries in Europe have issued separate complaints pursuant to their investigations alleging that the Company, along with several other companies, engaged in violations of competition laws in those countries. The Company will have the opportunity to respond to these complaints. As a result of our initial and on-going analyses of these complaints, the Company has taken appropriate reserves totaling $279 million fiscal year to date for potential fines for competition law violations. The remaining matters are in various stages of the investigatory process. It is still too early for us to reasonably estimate the total amount of fines to which the Company will be subject as a result of these various competition law issues. However, the ultimate resolution of these matters will likely result in fines or other costs in excess of amounts accrued to date that could materially impact our income statement and cash flows in the period in which they are accrued and paid, respectively. In other industries, these fines have amounted to hundreds of millions of dollars. We will continue to monitor developments for all of these investigations, and will record additional charges as appropriate. With respect to other litigation and claims, while considerable uncertainty exists, in the opinion of management and our counsel, the ultimate resolution of the various lawsuits and claims will not materially affect our financial position, results of operations or cash flows. We are also subject to contingencies pursuant to environmental laws and regulations that in the future may require us to take action to correct the effects on the environment of prior manufacturing and waste disposal practices. Based on currently available information, we do not believe the ultimate resolution of environmental remediation will have a material adverse effect on our financial position, results of operations or cash flows. Incom |
| Discontinued Operations | |
| 9 Months Ended
Mar. 31, 2010 | |
| Discontinued Operations | 10. Discontinued Operations In October 2009, the Company completed the divestiture of our global pharmaceuticals business to Warner Chilcott plc (Warner Chilcott) for $2.8 billion of cash, net of assumed and transferred liabilities. Under the terms of the agreement, Warner Chilcott acquired our portfolio of branded pharmaceutical products, our prescription drug product pipeline and manufacturing facilities in Puerto Rico and Germany. In addition, the majority of the employees working on the pharmaceuticals business were transferred to Warner Chilcott. The Company recorded an after-tax gain on the transaction of $1,464 million in the quarter ended December31, 2009, which is included in net earnings from discontinued operations in the Consolidated Statements of Earnings for the nine-month period ended March31, 2010. The pharmaceuticals business had historically been part of the Companys Health Care reportable segment. In accordance with the applicable accounting guidance for the disposal of long-lived assets, the results of the pharmaceuticals business are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. In November 2008, the Company completed the divestiture of our coffee business through the merger of its Folgers coffee subsidiary into The J.M. Smucker Company (Smucker) in an all-stock reverse Morris Trust transaction. In connection with the merger, 38.7million shares of common stock of the Company were tendered by shareholders and exchanged for all shares of Folgers common stock, resulting in an increase of treasury stock of $2,466 million. Pursuant to the merger, a Smucker subsidiary merged with and into Folgers and Folgers became a wholly owned subsidiary of Smucker. The Company recorded an after-tax gain on the transaction of $2,011 million in the quarter ended December31, 2008, which is included in net earnings from discontinued operations in the Consolidated Statements of Earnings for the nine-month period ended March31, 2009. The coffee business had historically been part of the Companys Snacks, Coffee and Pet Care reportable segment, as well as the coffee portion of our away-from-home business, which was included in the Fabric Care and Home Care reportable segment. In accordance with the applicable accounting guidance for the disposal of long-lived assets, the results of Folgers are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. Following is selected financial information included in net earnings from discontinued operations for the pharmaceuticals and coffee businesses: Three months ended March31 2010 2009 Amounts in millions Pharma Coffee Total Pharma Coffee Total Net sales $ $ $ $ 553 $ $ 553 Earnings from discontinued operations 236 45 281 Income tax expense (80 ) (17 ) (97 ) |
