THE PROCTER & GAMBLE COMPANY
NEWS RELEASE One P&G Plaza
Cincinnati, OH 45202
FOR IMMEDIATE RELEASE
PROCTER & GAMBLE BEATS EARNINGS EXPECTATIONS FOR QUARTER - RAISES
OUTLOOK FOR FISCAL YEAR
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Will Host Meeting With Investment Analysts On
January 28 At 7:00 A.m. in New York City
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CINCINNATI, Jan. 27, 2005 - The Procter & Gamble Company (NYSE:PG)
announced it sustained strong sales and earnings growth momentum in the October
- - December quarter. Sales increased nine percent and earnings per share
increased 14 percent, despite a challenging cost and competitive environment.
Earnings per share of $0.74 exceeded analysts' consensus estimate by $0.02. The
company also announced it will host a meeting with investment analysts on Jan.
28, 2005 at 7:00 a.m. ET in New York City.
Executive Summary
- -----------------
o Unit volume grew seven percent. Organic volume, which excludes acquisitions
and divestitures, increased eight percent. Each geographic region and all
business units posted volume growth of mid-single digits or greater, with
developing markets up in the high-teens.
o The company posted sales and earnings growth ahead of its long-term
targets. Net sales increased nine percent to $14.45 billion. Organic sales,
which exclude the impacts of acquisitions and divestitures and foreign
exchange, increased seven percent.
o Net earnings increased 12 percent to $2.04 billion despite higher commodity
costs, a challenging competitive environment and base period comparison
that included an early and severe cough/cold season. Diluted net earnings
per share increased 14 percent to $0.74.
"We continue to see strong top line growth across all of our businesses
behind consumer meaningful innovations and the strength of our brand and
geographic portfolio," said Chairman of the Board, President and Chief Executive
A. G. Lafley. "The steps we've been taking to offset the impacts of higher
material costs and the continued strength of our innovation pipeline give us
confidence to raise the earnings outlook for the remainder of the fiscal year."
QUARTERLY DISCUSSION
- --------------------
Unit volume increased seven percent. Organic volume increased eight
percent, which excludes the impact of acquisitions and divestitures - primarily
the sale of the juice business. Growth was broad-based - all geographic regions
and businesses delivered volume growth of mid-single digits or greater, led by
developing market growth in the high-teens and 10 percent growth in fabric and
home care.
Net sales increased nine percent to $14.45 billion, including a three
percent benefit from foreign exchange. Organic sales increased seven percent,
well above the company's long term target of three to five percent. Strong
growth in developing markets resulted in a negative mix impact of one percent on
sales. Pricing did not have an impact on sales growth. Prior quarter price
reductions, primarily in Western Europe to address the growth of hard
discounters, were offset by price increases to recover higher commodity costs in
family care, health care and several fabric care markets.
Net earnings increased 12 percent to $2.04 billion against a strong base
period comparison that included the benefit of an early cough/cold season in
North America. Earnings growth in the quarter was driven primarily by volume,
cost reduction programs and pricing adjustments, which partially recovered
higher commodity costs. Earnings were reduced by commodity price increases as
well as marketing investments in support of initiatives such as Febreze Air
Effects(R), Febreze Scent Stories(R), Olay Moisturinse(R), Tide With a Touch of
Downy(R) and the expansion of Lenor(R) and Herbal Essences(R) in Japan.
Diluted net earnings per share increased 14 percent to $0.74 against a very
strong base period.
KEY FINANCIAL HIGHLIGHTS
- ------------------------
o Gross margin increased 30 basis points versus the prior year period. The
benefits of volume growth and cost reduction programs were partially offset
by higher commodity costs. Additionally, gross margin was negatively
impacted by strong developing market growth and product mix. The base
period included a higher percentage of sales in the health care business,
which has a higher gross margin than the company average.
o Selling, general and administrative expenses (SG&A) as a percentage of net
sales decreased 20 basis points. The improvement reflects the scale
benefits of strong top line growth partly offset by continued marketing
investments in product initiatives and the base business.
o The company's operating cash flow for the quarter was $2.06 billion
compared to $2.36 billion in the comparable prior year period. Higher net
earnings were offset by increases in working capital, primarily inventory.
Inventory levels increased in support of upcoming product initiatives,
including Tide Coldwater(R), Mr. Clean Magic Reach(R), Pantene Color
Expressions(R) and the Kandoo(R) toddler care launch in North America, and
a number of businesses coming off product allocation, such as Tampax
Pearl(R) and several segments of the diaper business. Accounts payable,
accrued and other liabilities also decreased operating cash flow versus the
prior year due primarily to higher tax payments. Capital spending as a
percent of sales was slightly greater than three percent, in line with
year-ago and below the company's long-term target. Free cash flow, defined
as operating cash flow less capital spending, was $1.56 billion. Free cash
flow productivity was 77 percent for the quarter. The company remains
confident it will deliver free cash flow productivity for the fiscal year
at or above the long-term target of 90 percent.
BUSINESS SEGMENT DISCUSSION
- ---------------------------
The following provides perspective on the company's October - December
results by business segment.
BEAUTY CARE
- -----------
o Beauty care delivered another quarter of strong top- and bottom-line
growth. Unit volume increased nine percent. The Olay(R) brand delivered
strong double-digit growth behind the continued success of Olay
Regenerist(R), expansion to new geographies, and the launch of Olay Quench
Hand & Body(R) lotion. Global retail hair care volume grew high-single
digits led by the Pantene(R), Head & Shoulders(R), Herbal Essences(R),
Rejoice(R) and Aussie(R) brands, which were all up double-digits. In
Western Europe, shampoo shares are up more than a point to 28 percent -
about a point ahead of the nearest competitor. In North America, volume was
up modestly as strong growth of Head & Shoulders(R), Aussie(R) and
Pantene(R) was partially offset by lower shipments for minor shampoo brands
that have been de-emphasized. Feminine care delivered double-digit growth
behind the continued strength of the Always(R)/Whisper(R), Naturella(R) and
Tampax(R) brands. The Always(R) brand grew double-digits behind the new
cotton-like topsheet upgrade and mid-tier entries in Latin America, Eastern
Europe, China and South East Asia. Always(R) is now at record high value
shares of 47 percent in the U.S. and 65 percent in the U.K. Naturella(R)
brand volume nearly tripled versus the same quarter last year behind
expansion into Central and Eastern Europe and continued growth in Latin
America.
o Beauty care net sales increased 12 percent to $5.02 billion, including a
positive foreign exchange impact of four percent. Strong growth in
developing markets resulted in a negative mix impact of one percent on
sales. Net earnings increased 24 percent to $814 million. Earnings growth
was driven by higher volume, cost reduction programs, the impact of the
domination agreement with Wella and the company's increased ownership of
the China operation. Net earnings were reduced by increased marketing
investments for product initiatives, including Olay Moisturinse(R), Lacoste
Touch of Pink(R), Pantene Pro-Health(R) and the expansion of Herbal
Essences(R) in Japan.
HEALTH, BABY & FAMILY CARE
- --------------------------
o Health care results were mixed. Unit volume increased six percent behind
strong growth of Actonel(R), Prilosec OTC(R) and double-digit growth in
developing markets, primarily in oral care. Global oral care volume was up
low single digits versus a strong base period that included pipeline
shipments in support of the launch of Crest Whitestrips Premium(R).
Crest(R) dentifrice past three month U.S. all outlet value share was over
33 percent, up more than a point versus the prior quarter. Crest volume was
up more than 30 percent in developing markets, with Greater China up over
50 percent. In Russia, toothpaste share continues to grow rapidly and is
now over 24 percent, up nearly eight points compared to the prior year.
o Health care net sales increased seven percent to $2.04 billion, including a
positive foreign exchange impact of two percent. Pricing added one percent
to sales, while product mix reduced sales by two percent due to the shift
of Macrobid(R) branded sales to generic sales and strong developing market
growth. As anticipated, net earnings decreased four percent to $313 million
against a very strong base period where earnings grew 32 percent. The base
period included strong growth of Vicks(R) due to the early cough/cold
season in North America, as well as the launch of Crest Whitestrips
Premium(R). Additionally, earnings for the quarter were negatively impacted
by an increase in the royalty expense rate for Prilosec OTC(R), higher
commodity prices and one-time costs associated with the Intrinsa(R)
program.
o Baby and family care delivered very strong results for the quarter. Unit
volume increased six percent, driven primarily by strength in baby care in
North America and developing markets. U.S. Pampers(R) diaper past three
months all outlet value share was over 27 percent, up about a point versus
year-ago behind the continued leveraging of the Baby Stages of
Development(R) line and "Feel `n Learn"(R) training pants. Western Europe
Pampers diaper share is now over 54 percent, up nearly two points versus
year-ago. This growth has been driven by ongoing product innovations on
both the Baby Dry(R) and the premium Baby Stages of Development(R) line.
The company recently expanded into personal toddler care in North America,
building on its success in Western Europe with Kandoo Toddler Care Wipes
and Handsoap(R). Family care volume continued its momentum in North America
behind the recent Bounty(R) and Charmin(R) initiatives. U.S. all outlet
value share for Bounty(R) is 43 percent, up nearly two points.
o Baby and family care net sales increased 11 percent to $2.98 billion,
including a positive foreign exchange impact of three percent. Pricing had
a one percent positive impact on sales growth, primarily behind the recent
price increase in North America family care. Net earnings grew 28 percent
to $360 million. Earnings improved behind volume growth, pricing in North
America family care and cost savings, partly offset by higher commodity
costs. Also, price increases for diapers have recently been announced in
select markets in Latin America and Central and Eastern Europe to offset
higher commodity costs.
HOUSEHOLD CARE
- --------------
o Fabric and home care delivered strong top line growth behind the expansion
of its brand and geographic portfolio, as well as continued investments in
product initiatives. Unit volume increased 10 percent, including a two
percent impact from acquisitions. Fabric care grew volume double-digits for
the quarter behind high-teens growth in developing markets and the
continued success of Lenor(R) in North East Asia and Downy Simple
Pleasures(R) in North America. Western Europe fabric care grew volume
double-digits behind the continued growth of Ariel(R), packaging
improvements on fabric enhancers and the acquisition of the Gamma(R) and
Axion(R) brands. Home care volume also increased double-digits led by Mr.
Clean(R), Swiffer(R) and Febreze(R). Febreze Air Effects(R) has quickly
captured a 10 percent share of the air freshening sprays market, and the
brand now has a 16 percent share of the air care market.
o Fabric and home care net sales increased 11 percent to $3.78 billion,
including a foreign exchange benefit of three percent. Sales growth
includes a negative mix impact of two percent from faster growth in
developing markets and mid-tier products, including Gain(R) in North
America. Net earnings of $566 million were essentially flat versus the
prior year. The benefits of volume growth were more than offset by
commodity cost increases and marketing expenses to support initiatives, as
well as costs incurred to optimize the North America supply chain. The
company recently announced price increases in the laundry category,
including the Gain(R) and Era(R) brands in the U.S., to partially offset
the impact of higher commodity costs. Earnings growth for the second half
of the fiscal year is expected to increase only modestly versus the prior
year. Margin pressure is expected to continue due to high commodity costs
and the company's plans to continue investing to drive top line growth,
including in major markets like China and Russia.
o Snacks and coffee volume was up five percent. Folgers(R) past three-month
all outlet value share was over 33 percent, up almost two points versus
year-ago. Pringles(R) past three-month all outlet value share was 14
percent, up modestly versus last year. Snacks and coffee net sales
increased five percent to $846 million including a two percent gain from
foreign exchange, which was offset by the impact of pricing. Net earnings
were $124 million, a four percent decrease. The coffee category continues
to experience higher commodity costs. As a consequence, the company
recently announced a 14 percent price increase for Folgers(R) coffee
intended to recover the impact of higher commodity prices, and expectations
are for strong earnings for snacks and coffee in the second half of the
year. Marketing investments increased in support of the launch of Home
Cafe(R).
JANUARY - MARCH QUARTER AND FISCAL YEAR GUIDANCE
- ------------------------------------------------
For the January - March quarter, net sales growth is expected to be in the
high-single digits. Foreign exchange is expected to contribute about two percent
to sales growth and be partly offset by the negative mix impact from continued
strong developing market growth. Diluted net earnings per share for the quarter
are expected to be in the range of $0.60 to $0.62.
Net sales for fiscal year 2005 are also expected to grow by high-single
digits. Foreign exchange is expected to add about two percent to sales growth.
This is expected to be partially offset by the negative mix effect from strong
growth in developing markets, where the average unit sales price is lower than
the balance of the company. Diluted net earnings per share for the fiscal year
are expected to be in the range of $2.61 to $2.64, an increase of $0.03 versus
prior guidance. This represents growth of 13 percent to 14 percent versus the
prior year despite a challenging cost and competitive environment.
MEETING WITH INVESTMENT ANALYSTS AND MEDIA
- ------------------------------------------
Procter & Gamble will host a meeting for investment analysts and the media
on Friday, Jan. 28, 2005 at 7:00 a.m. ET in New York City. A.G. Lafley, chairman
of the board, president and chief executive, and Clayton C. Daley, Jr., chief
financial officer, will discuss second quarter 2004/05 results and make other
announcements that impact the company. The meeting will be held at The
Millennium Broadway Hotel New York, 145 West 44th Street.
A live webcast of the presentation will begin at 7:00 a.m. ET. Media and
investors may access the live audio at http://www.pg.com/investing.
FORWARD-LOOKING STATEMENTS
- --------------------------
All statements, other than statements of historical fact included in this
release, are forward-looking statements, as that term is defined in the Private
Securities Litigation Reform Act of 1995. In addition to the risks and
uncertainties noted in this release, there are certain factors that could cause
actual results to differ materially from those anticipated by some of the
statements made. These include: (1) the ability to achieve business plans,
including with respect to lower income consumers and growing existing sales and
volume profitably despite high levels of competitive activity, especially with
respect to the product categories and geographical markets (including developing
markets) in which the company has chosen to focus; (2) successfully executing,
managing and integrating key acquisitions (including the Domination and Profit
Transfer Agreement with Wella); (3) the ability to manage and maintain key
customer relationships; (4) the ability to maintain key manufacturing and supply
sources (including sole supplier and plant manufacturing sources); (5) the
ability to successfully manage regulatory, tax and legal matters (including
product liability, patent, and other intellectual property matters), and to
resolve pending matters within current estimates; (6) the ability to
successfully implement, achieve and sustain cost improvement plans in
manufacturing and overhead areas, including the success of the company's
outsourcing projects; (7) the ability to successfully manage currency (including
currency issues in volatile countries), interest rate and certain commodity cost
exposures; (8) the ability to manage the continued global political and/or
economic uncertainty and disruptions, especially in the company's significant
geographical markets, as well as any political and/or economic uncertainty and
disruptions due to terrorist activities; (9) the ability to successfully manage
increases in the prices of raw materials used to make the company's products;
(10) the ability to stay close to consumers in an era of increased media
fragmentation; and (11) the ability to stay on the leading edge of innovation.
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 P&G
- ---------
Two billion times a day, P&G brands touch the lives of people around the
world. The company has one of the strongest portfolios of trusted, quality,
leadership brands, including Pampers(R), Tide(R), Ariel(R), Always(R),
Whisper(R), Pantene(R), Bounty(R), Pringles(R), Folgers(R), Charmin(R),
Downy(R), Lenor(R), Iams(R), Crest(R), Actonel(R), Olay(R), Clairol Nice `n
Easy(R), Head & Shoulders(R) and Wella(R). The P&G community consists of about
110,000 employees working in almost 80 countries worldwide. Please visit
http://www.pg.com for the latest news and in-depth information about P&G and its
brands.
# # #
P&G MEDIA CONTACT:
In the US: 1-866-PROCTER or 1-866-776-2837
International: +1-513-945-9087
P&G INVESTOR RELATIONS CONTACT:
Thomas Tippl: +513-983-2414
THE PROCTER & GAMBLE COMPANY
NON-GAAP MEASURES
In accordance with the SEC's Regulation G, the following provides
definitions of the non-GAAP measures used in the earnings release and the
reconciliation to the most closely related GAAP measure.
Organic sales growth is a non-GAAP measure of reported sales growth
excluding the impacts of acquisitions and divestitures and foreign exchange from
year-over-year comparisons. The company believes this provides investors with a
more complete understanding of underlying results and trends of the base
businesses by providing sales on a consistent basis. The reconciliation of
reported sales growth to organic sales growth:
Total Sales Growth 9%
Less: Foreign Exchange Impact 3%
Less: Acquisitions/Divestitures -1%
-----------------------------------------------
Organic Sales Growth 7%
OTHER MEASURES
The company also reports free cash flow. Free cash flow is defined as
operating cash flow less capital spending. The company views free cash flow as
an important indicator of the cash available for dividends and discretionary
investment. Free cash flow is also one of the measures used to evaluate
management and is a factor in determining at-risk compensation levels. Free cash
flow productivity is defined as the ratio of free cash flow to net earnings, and
is another measure used to evaluate management's performance. The company's
target for free cash flow productivity is 90 percent. The reconciliation of free
cash flow and free cash flow productivity is provided below:
Operating Capital Free Net Free Cash
($MM) Cash Flow Spending Cash Flow Earnings Flow Productivity
- --------------------------------------------------------------------------------
Jul - Sep'03 1,606 364 1,242 1,761 71%
Oct - Dec'03 2,355 446 1,909 1,818 105%
Jan - Mar'04 2,978 521 2,457 1,528 161%
Apr - Jun'04 2,423 693 1,730 1,374 126%
- --------------------------------------------------------------------------------
Jul - Jun'04 9,362 2,024 7,338 6,481 113%
Jul - Sep'04 1,918 413 1,505 2,001 75%
Oct - Dec'04 2,061 498 1,563 2,039 77%
- --------------------------------------------------------------------------------
Jul - Dec'04 3,979 911 3,068 4,040 76%
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Consolidated Earnings Information
OND QUARTER FYTD
---------------------------------------- ------------------------------------------
OND 04 OND 03 % CHG 12/31/2004 12/31/2003 % CHG
----------- ----------- ------------ ------------- ------------- ------------
NET SALES $ 14,452 $ 13,221 9 % $ 28,196 $ 25,416 11 %
COST OF PRODUCTS SOLD 6,871 6,324 9 % 13,482 12,203 10 %
----------- ----------- ------------- -------------
GROSS MARGIN 7,581 6,897 10 % 14,714 13,213 11 %
SELLING, GENERAL & ADMINISTRATIVE EXPENSE 4,511 4,155 9 % 8,774 7,828 12 %
----------- ----------- ------------- -------------
OPERATING INCOME 3,070 2,742 12 % 5,940 5,385 10 %
TOTAL INTEREST EXPENSE 200 149 381 290
OTHER NON-OPERATING INCOME, NET 55 29 237 69
----------- ----------- ------------- -------------
EARNINGS BEFORE INCOME TAXES 2,925 2,622 12 % 5,796 5,164 12 %
INCOME TAXES 886 804 1,756 1,585
NET EARNINGS 2,039 1,818 12 % 4,040 3,579 13 %
=========== =========== ============= =============
EFFECTIVE TAX RATE 30.3 % 30.7 % 30.3 % 30.7 %
PER COMMON SHARE:
BASIC NET EARNINGS $ 0.79 $ 0.69 14 % $ 1.57 $ 1.36 15 %
DILUTED NET EARNINGS $ 0.74 $ 0.65 14 % $ 1.47 $ 1.28 15 %
DIVIDENDS $ 0.25 $ 0.23 $ 0.50 $ 0.46
AVERAGE DILUTED SHARES OUTSTANDING 2,741.0 2,800.9 2,748.5 2,799.2
COMPARISONS AS A % OF NET SALES Basis Pt Chg Basis Pt Chg
COST OF PRODUCTS SOLD 47.5 % 47.8 % 47.8 % 48.0 %
GROSS MARGIN 52.5 % 52.2 % 30 52.2 % 52.0 % 20
SELLING, GENERAL & ADMINISTRATIVE EXPENSE 31.2 % 31.4 % (20) 31.1 % 30.8 % 30
OPERATING MARGIN 21.2 % 20.7 % 50 21.1 % 21.2 % (10)
EARNINGS BEFORE INCOME TAXES 20.2 % 19.8 % 20.6 % 20.3 %
NET EARNINGS 14.1 % 13.8 % 30 14.3 % 14.1 % 20
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Consolidated Earnings Information
---------------------------------------------------------------------
Three Months Ended December 31, 2004
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% Change Earnings % Change % Change
Versus Before Versus Net Versus
Net Sales Year Ago Income Taxes Year Ago Earnings Year Ago
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BEAUTY CARE $ 5,022 12% $ 1,166 15% $ 814 24%
HEALTH CARE 2,043 7% 472 -3% 313 -4%
BABY AND FAMILY CARE 2,978 11% 577 29% 360 28%
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HEALTH, BABY & FAMILY CARE 5,021 10% 1,049 12% 673 11%
FABRIC AND HOME CARE 3,784 11% 836 -1% 566 0%
SNACKS AND COFFEE 846 5% 190 -3% 124 -4%
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HOUSEHOLD CARE 4,630 10% 1,026 -1% 690 -1%
TOTAL BUSINESS SEGMENT 14,673 10% 3,241 9% 2,177 11%
CORPORATE (221) N/A (316) N/A (138) N/A
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TOTAL COMPANY 14,452 9% 2,925 12% 2,039 12%
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Six Months Ended December 31, 2004
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% Change Earnings % Change % Change
Versus Before Versus Net Versus
Net Sales Year Ago Income Taxes Year Ago Earnings Year Ago
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BEAUTY CARE $ 9,677 17% $ 2,174 14% $ 1,506 20%
HEALTH CARE 3,887 7% 847 -4% 568 -4%
BABY AND FAMILY CARE 5,828 10% 1,093 19% 680 18%
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HEALTH, BABY & FAMILY CARE 9,715 9% 1,940 8% 1,248 7%
FABRIC AND HOME CARE 7,594 12% 1,733 3% 1,166 3%
SNACKS AND BEVERAGES 1,586 3% 316 -7% 207 -8%
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HOUSEHOLD CARE 9,180 10% 2,049 2% 1,373 2%
TOTAL BUSINESS SEGMENT 28,572 12% 6,163 8% 4,127 9%
CORPORATE (376) N/A (367) N/A (87) N/A
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TOTAL COMPANY 28,196 11% 5,796 12% 4,040 13%
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
OCTOBER - DECEMBER NET SALES INFORMATION
(Percent Change vs. Year Ago) *
Volume Volume
With Without
Acquisitions/ Acquisitions/ Total Total Impact
Divestiture Divestitures FX Price Mix/Other Impact Ex-FX
-----------------------------------------------------------------------------------
BEAUTY CARE 9% 9% 4% 0% -1% 12% 8%
HEALTH CARE 6% 5% 2% 1% -2% 7% 5%
BABY AND FAMILY CARE 6% 6% 3% 1% 1% 11% 8%
FABRIC AND HOME CARE 10% 8% 3% 0% -2% 11% 8%
SNACKS AND COFFEE 5% 5% 2% -2% 0% 5% 3%
TOTAL COMPANY 7% 8% 3% 0% -1% 9% 6%
* These sales percentage changes are approximations based on quantitative formulas that are consistently applied.
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Cash Flows Information
-------------------------------------
Six Months Ended December 31
-------------------------------------
2004 2003
----------------- ---------------
BEGINNING CASH 5,469 5,912
OPERATING ACTIVITIES
NET EARNINGS 4,040 3,579
DEPRECIATION AND AMORTIZATION 928 857
DEFERRED INCOME TAXES 378 233
CHANGES IN:
ACCOUNTS RECEIVABLE (387) (452)
INVENTORIES (582) (74)
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES (518) (183)
OTHER OPERATING ASSETS & LIABILITIES (171) (144)
OTHER 291 145
----------------- ---------------
TOTAL OPERATING ACTIVITIES 3,979 3,961
----------------- ---------------
INVESTING ACTIVITIES
CAPITAL EXPENDITURES (911) (810)
PROCEEDS FROM ASSET SALES 367 124
ACQUISITIONS, NET OF CASH ACQUIRED (351) (5,358)
CHANGE IN INVESTMENT SECURITIES (73) (69)
----------------- ---------------
TOTAL INVESTING ACTIVITIES (968) (6,113)
----------------- ---------------
FINANCING ACTIVITIES
DIVIDENDS TO SHAREHOLDERS (1,335) (1,245)
CHANGE IN SHORT-TERM DEBT 50 2,791
ADDITIONS TO LONG TERM DEBT 3,041 1,405
REDUCTION OF LONG TERM DEBT (1,565) (993)
PROCEEDS FROM THE EXERCISE OF STOCK OPTIONS AND OTHER 201 233
TREASURY PURCHASES (1,633) (1,046)
----------------- ---------------
TOTAL FINANCING ACTIVITIES (1,241) 1,145
----------------- ---------------
EXCHANGE EFFECT ON CASH 437 38
----------------- ---------------
CHANGE IN CASH AND CASH EQUIVALENTS 2,207 (969)
----------------- ---------------
ENDING CASH 7,676 4,943
================= ===============
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Balance Sheet Information
December 31, 2004 June 30, 2004
---------------------------------------
CASH AND CASH EQUIVALENTS $ 7,676 $ 5,469
INVESTMENTS SECURITIES 494 423
ACCOUNTS RECEIVABLE 4,689 4,062
TOTAL INVENTORIES 5,176 4,400
OTHER 2,961 2,761
----------------- ---------------
TOTAL CURRENT ASSETS 20,996 17,115
NET PROPERTY, PLANT AND EQUIPMENT 14,502 14,108
NET GOODWILL AND OTHER INTANGIBLE ASSETS 25,306 23,900
OTHER NON-CURRENT ASSETS 2,228 1,925
----------------- ---------------
TOTAL ASSETS $ 63,032 $ 57,048
================= ===============
ACCOUNTS PAYABLE $ 3,264 $ 3,617
ACCRUED AND OTHER LIABILITIES 8,083 7,689
TAXES PAYABLE 2,695 2,554
DEBT DUE WITHIN ONE YEAR 9,861 8,287
----------------- ---------------
TOTAL CURRENT LIABILITIES 23,903 22,147
LONG-TERM DEBT 13,385 12,554
OTHER 5,860 5,069
----------------- ---------------
TOTAL LIABILITIES 43,148 39,770
----------------- ---------------
----------------- ---------------
TOTAL SHAREHOLDERS' EQUITY 19,884 17,278
----------------- ---------------
----------------- ---------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 63,032 $ 57,048
================= ===============