UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 1993
Commission file number 1-434
THE PROCTER & GAMBLE COMPANY
(Exact name of registrant as specified in its charter)
Ohio 31-0411980
(State of incorporation) (I.R.S. Employer Identification No.)
One Procter & Gamble Plaza, Cincinnati, Ohio 45202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (513) 983-1100
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No .
There were 683,303,526 shares of Common Stock outstanding as of January 21,
1993.
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PART I. FINANCIAL INFORMATION
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
Millions of Dollars Except Per Share Amounts
Three Months Ended Six Months Ended
December 31 December 31
1993 1992 1993 1992
------ ------ ------ ------
NET SALES $7,788 $7,839 $15,352 $15,718
Cost of products sold 4,394 4,493 8,622 8,915
Marketing, administrative, and
other expenses 2,371 2,432 4,622 4,866
Provision for restructuring -- -- -- 303
------ ------ ------ ------
OPERATING INCOME 1,023 914 2,108 1,634
Interest and other income 105 99 199 177
Interest expense 123 131 248 272
------ ------ ------ ------
EARNINGS BEFORE INCOME TAXES
& PRIOR YEARS' EFFECT OF
ACCOUNTING CHANGES 1,005 882 2,059 1,539
Income Taxes 352 306 736 553
------ ------ ------ ------
NET EARNINGS BEFORE PRIOR YEARS'
EFFECT OF ACCOUNTING CHANGES 653 576 1,323 986
Prior years' effect of accounting
changes, net of tax -- -- -- (925)
------ ------ ------ ------
NET EARNINGS $ 653 $ 576 $ 1,323 $ 61
====== ====== ====== ======
PER COMMON SHARE:
Net earnings before prior years'
effect of accounting changes $ .92 $ .81 $ 1.87 $ 1.38
Prior years' effect of accounting
changes, net of tax -- -- -- (1.36)
------ ------ ------ ------
Net Earnings $ .92 $ .81 $ 1.87 $ .02
Net Earnings assuming full
dilution $ .85 $ .76 $ 1.74 $ .05
Dividends per Common Share $ .31 $ .275 $ .62 $ .55
AVERAGE COMMON SHARES OUTSTANDING
(in millions) 682.3 679.6
<FN>
NOTE: 1992 has been restated to include prior years' effects of
postretirement benefits and income tax accounting changes amounting
to $(925) and current year's accounting change effects of $(14) for
the second quarter and $(35) for the six months. The 100% juice
divestiture reserve of $303, (or $200 after-tax and $.29 per
share), established in September 1992 and included in cost of
products sold, is now identified separately as a provision for
restructuring.
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THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET
Millions of Dollars
December 31 June 30
ASSETS 1993 1993
CURRENT ASSETS ---------- ----------
Cash and cash equivalents $ 2,412 $ 2,322
Accounts receivable, less allowance for
doubtful accounts 3,335 3,111
Inventories
Raw materials and supplies 1,118 1,154
Work in process 213 196
Finished products 1,583 1,553
Deferred income taxes 642 740
Prepaid expenses and other current assets 1,301 899
---------- ----------
10,604 9,975
---------- ----------
PROPERTY, PLANT, AND EQUIPMENT 15,089 14,877
LESS ACCUMULATED DEPRECIATION 5,600 5,392
---------- ----------
9,489 9,485
---------- ----------
GOODWILL AND OTHER INTANGIBLE ASSETS 3,731 3,762
OTHER ASSETS 1,719 1,713
---------- ----------
TOTAL $ 25,543 $ 24,935
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accruals $ 6,237 $ 6,475
Debt due within one year 1,851 1,812
---------- ----------
8,088 8,287
---------- ----------
LONG-TERM DEBT 5,293 5,174
OTHER LIABILITIES 3,743 3,850
DEFERRED INCOME TAXES 152 183
SHAREHOLDERS' EQUITY
Preferred stock 1,959 1,969
Common stock-shares outstanding
- Dec. 31 682,996,927 683 682
- June 30 681,754,226
Additional paid-in capital 517 477
Currency translation adjustments (172) (99)
Reserve for ESOP debt retirement (1,812) (1,836)
Retained earnings 7,092 6,248
---------- ----------
8,267 7,441
---------- ----------
TOTAL $ 25,543 $ 24,935
========== ==========
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THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
Millions of Dollars
Six Months Ended December 31
1993 1992
Cash and Cash Equivalents, beginning of year $2,322 $1,776
------- -------
OPERATING ACTIVITIES
Net earnings before prior years' effect
of accounting changes 1,323 986
Provision for Restructuring -- 303
Depreciation, depletion and amortization 557 562
Deferred income taxes 68 (104)
Increase in accounts receivable (293) (135)
Increase in inventories (50) (45)
Decrease in payables and accrued liabilities (129) (831)
Change in Other Liabilities (84) 23
Other (72) (51)
------- -------
1,320 708
------- -------
INVESTING ACTIVITIES
Capital expenditures (760) (731)
Proceeds from asset sales and retirements 38 636
Acquisitions (170) (11)
Marketable Securities (120) --
------- -------
(1,012) (106)
------- -------
FINANCING ACTIVITIES
Dividends to shareholders (474) (422)
Additions to short-term debt 357 733
Additions to long-term debt 413 368
Reduction of long-term debt (500) (800)
Proceeds from Stock Options 22 50
Purchase of treasury shares (6) (42)
------- -------
(188) (113)
EFFECT OF EXCHANGE RATES ON CASH AND ------- -------
CASH EQUIVALENTS (30) (70)
------- -------
INCREASE IN CASH AND CASH EQUIVALENTS 90 419
------- -------
Cash and Cash Equivalents, end of period $2,412 $2,195
======= =======
SUPPLEMENTAL DISCLOSURE
Non-cash transactions
Liabilities assumed in acquisitions $ 11 $ 48
Reduction in employee stock ownership
plan debt, guaranteed by the Company $ 24 $ 22
Conversion of preferred to common stock 11 7
<FN>
Note: 1992 has been restated for retroactive adoption of accounting change
related to postretirement benefits and income tax accounting.
The interim financial statements are unaudited, but in the opinion of the
Company include all adjustments, consisting only of normal recurring items,
necessary for a fair presentation of the data.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Net earnings for the October-December quarter increased 13% from the same
quarter in the previous year. Earnings per share were up 14% from the
previous year.
Unit volume growth and lower costs were the major factors contributing to the
increase in earnings. Unit volume was up 6%, excluding the discontinued pulp
and juice operations. Less favorable exchange rates limited earnings growth.
On a constant exchange rate basis, net earnings would have been up 17% from a
year ago.
Worldwide net sales for October-December decreased 1% from the same quarter
last year. The decline reflects adverse foreign exchange rates. Excluding
this effect, sales would have been up 3%.
For July-December, net earnings and earnings per share were up 12% from the
same six months in the previous year, excluding the prior years' effect of
accounting changes and a restructuring provision. Net sales were down 2%.
Excluding the impact of exchange rates, earnings would have increased 17% and
sales would have been up 3% from a year ago.
The U.S. consumer businesses continued to deliver strong unit volume gains
during October-December, including record shipments in December.
International achieved double-digit volume growth, despite difficult economic
conditions in many major markets. Volume growth was particularly strong in
the Far East, Latin America and Eastern Europe. Both the U.S. and
International businesses showed good earnings growth, due in part to the
restructuring program which is just beginning to contribute to earnings
progress.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10) The Procter & Gamble 1993 Non-Employee Directors' Stock Plan
(11) Computation of Earnings Per Share
(12) Computation of Ratio of Earnings to Fixed Charges
(b) No reports on Form 8-K have been filed during the quarter ended
December 31, 1993.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE PROCTER & GAMBLE COMPANY
/s/E. H. EATON
- ------------------------------
E. H. Eaton
Vice President and Comptroller
(Principal Accounting Officer)
Date: February 8, 1994
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EXHIBIT INDEX
Exhibit No. Page No.
(10) The Procter & Gamble 1993 Non-Employee
Directors' Stock Plan 7
(11) Computation of Earnings per Share 10
(12) Computation of Ratio of Earnings to Fixed
Charges 11
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