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Section 1: 8-K (FY1817 8-K INFORMATIONAL RECAST)

Document



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
  

FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act Of 1934
  
Date of Report (Date of earliest event reported)
October 10, 2018


395306920_pglogoa14.jpg

THE PROCTER & GAMBLE COMPANY
(Exact name of registrant as specified in its charter)

Ohio
 
1-434
 
31-0411980
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification Number)

One Procter & Gamble Plaza, Cincinnati, Ohio
 
45202
(Address of principal executive offices)
 
Zip Code

(513) 983-1100
 
45202
(Registrant's telephone number, including area code)
 
Zip Code
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨







ITEM 7.01    REGULATION FD DISCLOSURE

As disclosed in its Annual Report on Form 10-K for the year ended June 30, 2018, The Procter and Gamble Company (“the Company”, “we”) adopted the Financial Accounting Standards Board (FASB) ASU 2017-07, “Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715)” effective July 1, 2018. This informational Form 8-K provides revised historical Consolidated earnings information, along with selected financial information tables, for the three months ended June 30, March 31, December 31 and September 30 for the fiscal years ended 2018 and 2017, as well as for the fiscal years ended June 30, 2018 and June 30, 2017, reflecting the changes as described below.  This informational Form 8-K in no way revises or restates the previously filed Consolidated Statements of Comprehensive Income, Consolidated Balance Sheets, Consolidated Statements of Shareholders' Equity or Consolidated Statements of Cash Flows for the Company and consolidated subsidiaries for any period.
 
Fiscal Year 2018 and 2017 Changes
Topic 715 requires an entity to disaggregate the current service cost component from the other components of net defined benefit costs on the face of the income statement. It requires the service cost component to be presented with other current compensation costs for the related employees in the operating section of the income statement. Other components of net benefit costs are required to be presented outside of income from operations. The Company has adopted ASU 2017-07 retrospectively. As such, prior periods’ results have been revised to report the other components of net benefit costs, previously reported in Cost of products sold and Selling, general, and administrative expense (SG&A), within Other non-operating income/(expense), net. The other components of net benefit costs for the periods presented are a net credit/income. As a result, the movement of these components increases Cost of products sold and SG&A, with an offsetting benefit in Other non-operating income/(expense), net.
  
The above changes will be reflected in the consolidated financial statements beginning in the first quarter (July - September period) of fiscal year 2018-2019, starting with the Form 10-Q that will be issued for the three-month period ending September 30, 2018.  Reporting changes for the above items will be reflected for all historical periods presented.   In advance of the Form 10-Q filing, this document provides revised gross margin and operating income information for the Consolidated Earnings information for the three months ended June 30, March 31, December 31 and September 30 for the fiscal years ended 2018 and 2017, as well as for the fiscal years ended June 30, 2018 and June 30, 2017.
 
This 8-K is furnished pursuant to Item 7.01 “Regulation FD Disclosure.”















THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Consolidated Earnings Information
 
 
  Fiscal Year Ended
June 30, 2018
 
  Fiscal Year Ended
June 30, 2017
 
 
As Reported
 
Revised
 
As Reported
 
Revised
NET SALES
 
$
66,832

 
$
66,832

 
$
65,058

 
$
65,058

    COST OF PRODUCTS SOLD
 
34,268

 
34,432

 
32,535

 
32,638

GROSS PROFIT
 
32,564

 
32,400

 
32,523

 
32,420

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
 
18,853

 
19,037

 
18,568

 
18,654

OPERATING INCOME
 
13,711

 
13,363

 
13,955

 
13,766

    INTEREST EXPENSE
 
506

 
506

 
465

 
465

    INTEREST INCOME
 
247

 
247

 
171

 
171

    OTHER NON-OPERATING INCOME/(EXPENSE), NET
 
(126
)
 
222

 
(404
)
 
(215
)
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
 
13,326

 
13,326

 
13,257

 
13,257

    INCOME TAXES
 
3,465

 
3,465

 
3,063

 
3,063

NET EARNINGS  FROM CONTINUING OPERATIONS
 
9,861

 
9,861

 
10,194

 
10,194

NET EARNINGS FROM DISCONTINUED OPERATIONS
 

 

 
5,217

 
5,217

NET EARNINGS
 
9,861

 
9,861

 
15,411

 
15,411

    LESS:  NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
 
111

 
111

 
85

 
85

NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE
 
$
9,750

 
$
9,750

 
$
15,326

 
$
15,326

 
 
 
 
 
 
 
 
 
EFFECTIVE TAX RATE
 
26.0
%
 
26.0
%
 
23.1
%
 
23.1
%
 
 
 
 
 
 
 
 
 
BASIC NET EARNINGS PER COMMON SHARE:(1)
 
 
 
 
 
 
 
 
    EARNINGS FROM CONTINUING OPERATIONS
 
$
3.75

 
$
3.75

 
$
3.79

 
$
3.79

    EARNINGS FROM DISCONTINUED OPERATIONS
 
$

 
$

 
$
2.01

 
$
2.01

    BASIC NET EARNINGS PER COMMON SHARE
 
$
3.75

 
$
3.75

 
$
5.80

 
$
5.80

DILUTED NET EARNINGS PER COMMON SHARE:(1)
 
 
 
 
 
 
 
 
    EARNINGS FROM CONTINUING OPERATIONS
 
$
3.67

 
$
3.67

 
$
3.69

 
$
3.69

    EARNINGS FROM DISCONTINUED OPERATIONS
 
$

 
$

 
$
1.90

 
$
1.90

    DILUTED NET EARNINGS PER COMMON SHARE
 
$
3.67

 
$
3.67

 
$
5.59

 
$
5.59

 
 
 
 
 
 
 
 
 
DIVIDENDS PER COMMON SHARE
 
$
2.7860

 
$
2.7860

 
$
2.6981

 
$
2.6981

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
2,656.7

 
2,656.7

 
2,740.4

 
2,740.4

(1) 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 Except Per Share Amounts)
Consolidated Earnings Information
 
 
  Three Months Ended June 30, 2018
 
  Three Months Ended June 30, 2017
 
 
As Reported
 
Revised
 
As Reported
 
Revised
NET SALES
 
$
16,503

 
$
16,503

 
$
16,079

 
$
16,079

    COST OF PRODUCTS SOLD
 
9,029

 
9,070

 
8,299

 
8,325

GROSS PROFIT
 
7,474

 
7,433

 
7,780

 
7,754

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
 
4,797

 
4,846

 
4,831

 
4,854

OPERATING INCOME
 
2,677

 
2,587

 
2,949

 
2,900

    INTEREST EXPENSE
 
136

 
136

 
116

 
116

    INTEREST INCOME
 
63

 
63

 
48

 
48

    OTHER NON-OPERATING INCOME/(EXPENSE), NET
 
(315
)
 
(225
)
 
46

 
95

EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
 
2,289

 
2,289

 
2,927

 
2,927

    INCOME TAXES
 
399

 
399

 
725

 
725

NET EARNINGS  FROM CONTINUING OPERATIONS
 
1,890

 
1,890

 
2,202

 
2,202

NET EARNINGS FROM DISCONTINUED OPERATIONS
 

 

 

 

NET EARNINGS
 
1,890

 
1,890

 
2,202

 
2,202

    LESS:  NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
 
(1
)
 
(1
)
 
(13
)
 
(13
)
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE
 
$
1,891

 
$
1,891

 
$
2,215

 
$
2,215

 
 
 
 
 
 
 
 
 
EFFECTIVE TAX RATE
 
17.4
%
 
17.4
%
 
24.8
%
 
24.8
%
 
 
 
 
 
 
 
 
 
BASIC NET EARNINGS PER COMMON SHARE:(1)
 
 
 
 
 
 
 
 
    EARNINGS FROM CONTINUING OPERATIONS
 
$
0.73

 
$
0.73

 
$
0.84

 
$
0.84

    EARNINGS FROM DISCONTINUED OPERATIONS
 
$

 
$

 
$

 
$

    BASIC NET EARNINGS PER COMMON SHARE
 
$
0.73

 
$
0.73

 
$
0.84

 
$
0.84

DILUTED NET EARNINGS PER COMMON SHARE:(1)
 
 
 
 
 
 
 
 
    EARNINGS FROM CONTINUING OPERATIONS
 
$
0.72

 
$
0.72

 
$
0.82

 
$
0.82

    EARNINGS FROM DISCONTINUED OPERATIONS
 
$

 
$

 
$

 
$

    DILUTED NET EARNINGS PER COMMON SHARE
 
$
0.72

 
$
0.72

 
$
0.82

 
$
0.82

 
 
 
 
 
 
 
 
 
DIVIDENDS PER COMMON SHARE
 
$
0.7172

 
$
0.7172

 
$
0.6896

 
$
0.6896

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
2,620.9

 
2,620.9

 
2,695.6

 
2,695.6

(1) 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 Except Per Share Amounts)
Consolidated Earnings Information
 
 
  Three Months Ended March 31, 2018
 
  Three Months Ended March 31, 2017
 
 
As Reported
 
Revised
 
As Reported
 
Revised
NET SALES
 
$
16,281

 
$
16,281

 
$
15,605

 
$
15,605

    COST OF PRODUCTS SOLD
 
8,343

 
8,384

 
7,836

 
7,862

GROSS PROFIT
 
7,938

 
7,897

 
7,769

 
7,743

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
 
4,642

 
4,688

 
4,409

 
4,432

OPERATING INCOME
 
3,296

 
3,209

 
3,360

 
3,311

    INTEREST EXPENSE
 
133

 
133

 
96

 
96

    INTEREST INCOME
 
69

 
69

 
46

 
46

    OTHER NON-OPERATING INCOME, NET
 
21

 
108

 
26

 
75

EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
 
3,253

 
3,253

 
3,336

 
3,336

    INCOME TAXES
 
713

 
713

 
780

 
780

NET EARNINGS  FROM CONTINUING OPERATIONS
 
2,540

 
2,540

 
2,556

 
2,556

NET EARNINGS FROM DISCONTINUED OPERATIONS
 

 

 

 

NET EARNINGS
 
2,540

 
2,540

 
2,556

 
2,556

    LESS:  NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
 
29

 
29

 
34

 
34

NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE
 
$
2,511

 
$
2,511

 
$
2,522

 
$
2,522

 
 
 
 
 
 
 
 
 
EFFECTIVE TAX RATE
 
21.9
%
 
21.9
%
 
23.4
%
 
23.4
%
 
 
 
 
 
 
 
 
 
BASIC NET EARNINGS PER COMMON SHARE:(1)
 
 
 
 
 
 
 
 
    EARNINGS FROM CONTINUING OPERATIONS
 
$
0.97

 
$
0.97

 
$
0.96

 
$
0.96

    EARNINGS FROM DISCONTINUED OPERATIONS
 
$

 
$

 
$

 
$

    BASIC NET EARNINGS PER COMMON SHARE
 
$
0.97

 
$
0.97

 
$
0.96

 
$
0.96

DILUTED NET EARNINGS PER COMMON SHARE:(1)
 
 
 
 
 
 
 
 
    EARNINGS FROM CONTINUING OPERATIONS
 
$
0.95

 
$
0.95

 
$
0.93

 
$
0.93

    EARNINGS FROM DISCONTINUED OPERATIONS
 
$

 
$

 
$

 
$

    DILUTED NET EARNINGS PER COMMON SHARE
 
$
0.95

 
$
0.95

 
$
0.93

 
$
0.93

 
 
 
 
 
 
 
 
 
DIVIDENDS PER COMMON SHARE
 
$
0.6896

 
$
0.6896

 
$
0.6695

 
$
0.6695

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
2,645.6

 
2,645.6

 
2,705.5

 
2,705.5

(1) 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 Except Per Share Amounts)
Consolidated Earnings Information
 
 
  Three Months Ended December 31, 2017
 
  Three Months Ended December 31, 2016
 
 
As Reported
 
Revised
 
As Reported
 
Revised
NET SALES
 
$
17,395

 
$
17,395

 
$
16,856

 
$
16,856

    COST OF PRODUCTS SOLD
 
8,667

 
8,709

 
8,298

 
8,323

GROSS PROFIT
 
8,728

 
8,686

 
8,558

 
8,533

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
 
4,725

 
4,767

 
4,683

 
4,706

OPERATING INCOME
 
4,003

 
3,919

 
3,875

 
3,827

    INTEREST EXPENSE
 
122

 
122

 
122

 
122

    INTEREST INCOME
 
66

 
66

 
42

 
42

    OTHER NON-OPERATING INCOME/(EXPENSE), NET
 
86

 
170

 
(539
)
 
(491
)
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
 
4,033

 
4,033

 
3,256

 
3,256

    INCOME TAXES
 
1,472

 
1,472

 
695

 
695

NET EARNINGS  FROM CONTINUING OPERATIONS
 
2,561

 
2,561

 
2,561

 
2,561

NET EARNINGS FROM DISCONTINUED OPERATIONS
 

 

 
5,335

 
5,335

NET EARNINGS
 
2,561

 
2,561

 
7,896

 
7,896

    LESS:  NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
 
66

 
66

 
21

 
21

NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE
 
$
2,495

 
$
2,495

 
$
7,875

 
$
7,875

 
 
 
 
 
 
 
 
 
EFFECTIVE TAX RATE
 
36.5
%
 
36.5
%
 
21.3
%
 
21.3
%
 
 
 
 
 
 
 
 
 
BASIC NET EARNINGS PER COMMON SHARE:(1)
 
 
 
 
 
 
 
 
    EARNINGS FROM CONTINUING OPERATIONS
 
$
0.96

 
$
0.96

 
$
0.96

 
$
0.96

    EARNINGS FROM DISCONTINUED OPERATIONS
 
$

 
$

 
$
2.05

 
$
2.05

    BASIC NET EARNINGS PER COMMON SHARE
 
$
0.96

 
$
0.96

 
$
3.01

 
$
3.01

DILUTED NET EARNINGS PER COMMON SHARE:(1)
 
 
 
 
 
 
 
 
    EARNINGS FROM CONTINUING OPERATIONS
 
$
0.93

 
$
0.93

 
$
0.93

 
$
0.93

    EARNINGS FROM DISCONTINUED OPERATIONS
 
$

 
$

 
$
1.95

 
$
1.95

    DILUTED NET EARNINGS PER COMMON SHARE
 
$
0.93

 
$
0.93

 
$
2.88

 
$
2.88

 
 
 
 
 
 
 
 
 
DIVIDENDS PER COMMON SHARE
 
$
0.6896

 
$
0.6896

 
$
0.6695

 
$
0.6695

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
2,669.6

 
2,669.6

 
2,737.6

 
2,737.6

(1) 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 Except Per Share Amounts)
Consolidated Earnings Information
 
 
  Three Months Ended September 30, 2017
 
  Three Months Ended September 30, 2016
 
 
As Reported
 
Revised
 
As Reported
 
Revised
NET SALES
 
$
16,653

 
$
16,653

 
$
16,518

 
$
16,518

    COST OF PRODUCTS SOLD
 
8,229

 
8,269

 
8,102

 
8,128

GROSS PROFIT
 
8,424

 
8,384

 
8,416

 
8,390

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
 
4,689

 
4,736

 
4,645

 
4,662

OPERATING INCOME
 
3,735

 
3,648

 
3,771

 
3,728

    INTEREST EXPENSE
 
115

 
115

 
131

 
131

    INTEREST INCOME
 
49

 
49

 
35

 
35

    OTHER NON-OPERATING INCOME, NET
 
82

 
169

 
63

 
106

EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
 
3,751

 
3,751

 
3,738

 
3,738

    INCOME TAXES
 
881

 
881

 
863

 
863

NET EARNINGS  FROM CONTINUING OPERATIONS
 
2,870

 
2,870

 
2,875

 
2,875

NET EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS
 

 

 
(118
)
 
(118
)
NET EARNINGS
 
2,870

 
2,870

 
2,757

 
2,757

    LESS:  NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
 
17

 
17

 
43

 
43

NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE
 
$
2,853

 
$
2,853

 
$
2,714

 
$
2,714

 
 
 
 
 
 
 
 
 
EFFECTIVE TAX RATE
 
23.5
%
 
23.5
%
 
23.1
%
 
23.1
%
 
 
 
 
 
 
 
 
 
BASIC NET EARNINGS PER COMMON SHARE:(1)
 
 
 
 
 
 
 
 
    EARNINGS FROM CONTINUING OPERATIONS
 
$
1.09

 
$
1.09

 
$
1.03

 
$
1.03

    EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS
 
$

 
$

 
$
(0.04
)
 
$
(0.04
)
    BASIC NET EARNINGS PER COMMON SHARE
 
$
1.09

 
$
1.09

 
$
0.99

 
$
0.99

DILUTED NET EARNINGS PER COMMON SHARE:(1)
 
 
 
 
 
 
 
 
    EARNINGS FROM CONTINUING OPERATIONS
 
$
1.06

 
$
1.06

 
$
1.00

 
$
1.00

    EARNINGS/(LOSS)  FROM DISCONTINUED OPERATIONS
 
$

 
$

 
$
(0.04
)
 
$
(0.04
)
    DILUTED NET EARNINGS PER COMMON SHARE
 
$
1.06

 
$
1.06

 
$
0.96

 
$
0.96

 
 
 
 
 
 
 
 
 
DIVIDENDS PER COMMON SHARE
 
$
0.6896

 
$
0.6896

 
$
0.6695

 
$
0.6695

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
2,690.6

 
2,690.6

 
2,822.9

 
2,822.9

(1) Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.







Exhibit 1: Selected Revised Financial Information and Non-GAAP Measures
The following tables provide selected non-GAAP financial information revised for the impact of the adoption of ASU 2017-07, "Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("Retirement Benefits Accounting Change"). In accordance with the SEC's Regulation G, definitions of the non-GAAP measures presented with the selected revised financial information are provided below and the reconciliation to the most closely related revised GAAP measure are provided within the following tables.

The Core earnings from continuing operations measures included in the following reconciliation tables refer to the equivalent GAAP measures adjusted as applicable for the following items:
Incremental Restructuring: The Company has had and continues to have an ongoing level of restructuring activities. Such activities have resulted in ongoing annual restructuring related charges of approximately $250 - $500 million before tax. In 2012, the Company began a $10 billion strategic productivity and cost savings initiative that includes incremental restructuring activities. In 2017, we communicated details of an additional multi-year productivity and cost savings plan. This results in incremental restructuring charges to accelerate productivity efforts and cost savings. The adjustment to Core earnings includes only the restructuring costs above what we believe are the normal recurring level of restructuring costs.
Transitional Impacts of the U.S. Tax Act: In December 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "U.S. Tax Act"). This resulted in a net charge of $602 million for the fiscal year 2018. The adjustment to Core earnings only includes this transitional impact. It does not include the ongoing impacts of the lower U.S. statutory rate on current year earnings.
Early debt extinguishment charges: In fiscal 2018 and 2017, the Company recorded after-tax charges of $243 million and $345 million, respectively, due to the early extinguishment of certain long-term debt.  These charges represent the difference between the reacquisition price and the par value of the debt extinguished. 
We do not view the above items to be part of our sustainable results and their exclusion from Core earnings from continuing operations measures provides a more comparable measure of year-on-year results. These items are also excluded when evaluating senior management in determining their at-risk compensation.





Core operating profit margin: Core operating profit margin is a measure of the Company's operating margin adjusted for items as indicated. Management believes this non-GAAP measure provides a supplemental perspective to the Company’s operating efficiency over time.
Core gross margin: Core gross margin is a measure of the Company's gross margin adjusted for items as indicated. Management believes this non-GAAP measure provides a supplemental perspective to the Company’s operating efficiency over time.
Core selling, general and administrative (SG&A) expense as a percentage of net sales: Core SG&A expense as a percentage of net sales is a measure of the Company's selling, general and administrative expenses adjusted for items as indicated. Management believes this non-GAAP measure provides a supplemental perspective to the Company's operating efficiency over time.
Core EPS and currency-neutral Core EPS: Core earnings per share, or Core EPS, is a measure of the Company's diluted net earnings per share from continuing operations adjusted as indicated. Currency-neutral Core EPS is a measure of the Company's Core EPS excluding the incremental current year impact of foreign exchange. Management views these non-GAAP measures as a useful supplemental measure of Company performance over time. These measures are also used when evaluating senior management in determining their at-risk compensation.
Core Tax Rate: This is a measure of the Company's revised tax rate on continuing operations adjusted for items as indicated. 






THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information & Non-GAAP Measures, Revised for the Retirement Benefits Accounting Change
Fiscal Year Ended June 30, 2018
 
AS REVISED (GAAP)
 
INCREMENTAL RESTRUCTURING
 
TRANSITIONAL IMPACTS OF US TAX ACT
 
EARLY DEBT EXTINGUISHMENT
 
ROUNDING
 
NON-GAAP (CORE)
COST OF PRODUCTS SOLD
34,432

 
(724
)
 

 

 
(1
)
 
33,707

GROSS PROFIT
32,400

 
724

 

 

 
1

 
33,125

GROSS MARGIN
48.5
%
 
1.1
 %
 
 %
 
%
 
%
 
49.6
%
SELLING, GENERAL, & ADMINISTRATIVE EXPENSE
19,037

 
(1
)
 

 

 
1

 
19,037

SELLING, GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
28.5
%
 
 %
 
 %
 
%
 
%
 
28.5
%
OPERATING INCOME
13,363

 
725

 

 

 

 
14,088

OPERATING PROFIT MARGIN
20.0
%
 
1.1
 %
 
 %
 
%
 
%
 
21.1
%
INCOME TAX ON CONTINUING OPERATIONS
3,465

 
129

 
(602
)
 
103

 

 
3,095

NET EARNINGS ATTRIBUTABLE TO P&G
9,750

 
610

 
602

 
243

 
(1
)
 
11,204

EFFECTIVE TAX RATE
26.0
%
 
(0.4
)%
 
(4.2
)%
 
0.1
%
 
%
 
21.5
%
 
 
 
 
 
 
 
 
 
 
 
Core EPS:
DILUTED NET EARNINGS PER COMMON SHARE*
3.67

 
0.23

 
0.23

 
0.09

 

 
4.22

 
 
 
 
 
LESS: CURRENCY IMPACT TO EARNINGS
 
 
(0.05
)
 
 
 
 
 
 
 
CURRENCY-NEUTRAL CORE EPS
 
 
4.17

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,656.7

 
 
 
 
 
 
 
 
 
 
*Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.

FY 18 CHANGE VERSUS YEAR AGO
 
 
CORE GROSS MARGIN
(100)
BPS
CORE SELLING GENRAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
(30)
BPS
CORE OPERATING PROFIT MARGIN
(70)
BPS
CORE EPS
8%
 
CURRENCY-NEUTRAL CORE EPS
6%
 








THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information & Non-GAAP Measures, Revised for the Retirement Benefits Accounting Change
Fiscal Year Ended June 30, 2017
 
AS REVISED (GAAP)
 
DISCONTINUED OPERATIONS
 
INCREMENTAL RESTRUCTURING
 
EARLY DEBT EXTINGUISHMENT
 
ROUNDING
 
NON-GAAP (CORE)
COST OF PRODUCTS SOLD
32,638

 

 
(498
)
 

 

 
32,140

GROSS PROFIT
32,420

 

 
498

 

 

 
32,918

GROSS MARGIN
49.8
%
 
%
 
0.8
%
 
%
 
 %
 
50.6
%
SELLING, GENERAL, & ADMINISTRATIVE EXPENSE
18,654

 

 
107

 

 

 
18,761

SELLING, GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
28.7
%
 
%
 
0.2
%
 
%
 
(0.1
)%
 
28.8
%
OPERATING INCOME
13,766

 

 
391

 

 

 
14,157

OPERATING PROFIT MARGIN
21.2
%
 
%
 
0.6
%
 
%
 
 %
 
21.8
%
INCOME TAX ON CONTINUING OPERATIONS
3,063

 

 
120

 
198

 

 
3,381

NET EARNINGS ATTRIBUTABLE TO P&G
15,326

 
(5,217
)
 
279

 
345

 
(1
)
 
10,732

EFFECTIVE TAX RATE
23.1
%
 
%
 
0.2
%
 
0.5
%
 
 %
 
23.8
%
 
 
 
 
 
 
 
 
 
 
 
Core EPS:
DILUTED NET EARNINGS PER COMMON SHARE*
5.59

 
(1.90
)
 
0.10

 
0.13

 

 
3.92

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,740.4

 
 
 
 
 
 
 
 
 
 
*Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.






THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information & Non-GAAP Measures, Revised for the Retirement Benefits Accounting Change
Three Months Ended June 30, 2018
 
AS REVISED (GAAP)
 
INCREMENTAL RESTRUCTURING
 
TRANSITIONAL IMPACTS OF US TAX ACT
 
EARLY DEBT EXTINGUISHMENT
 
ROUNDING
 
NON-GAAP (CORE)
COST OF PRODUCTS SOLD
9,070

 
(428
)
 

 

 
(1
)
 
8,641

GROSS PROFIT
7,433

 
428

 

 

 
1

 
7,862

GROSS MARGIN
45.0
%
 
2.6
 %
 
%
 
%
 
%
 
47.6
%
SELLING, GENERAL, & ADMINISTRATIVE EXPENSE
4,846

 
(3
)
 

 

 
2

 
4,845

SELLING, GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
29.4
%
 
 %
 
%
 
%
 
%
 
29.4
%
OPERATING INCOME
2,587

 
431

 

 

 
(1
)
 
3,017

OPERATING PROFIT MARGIN
15.7
%
 
2.6
 %
 
%
 
%
 
%
 
18.3
%
INCOME TAX ON CONTINUING OPERATIONS
399

 
66

 
48

 
103

 
1

 
617

NET EARNINGS ATTRIBUTABLE TO P&G
1,891

 
368

 
(48
)
 
243

 
(1
)
 
2,453

EFFECTIVE TAX RATE
17.4
%
 
(0.4
)%
 
1.6
%
 
1.4
%
 
0.1
%
 
20.1
%
 
 
 
 
 
 
 
 
 
 
 
Core EPS:
DILUTED NET EARNINGS PER COMMON SHARE*
0.72

 
0.14

 
(0.02
)
 
0.09

 
0.01

 
0.94

 
 
 
 
 
LESS: CURRENCY IMPACT TO EARNINGS
 
 
0.01

 
 
 
 
 
 
 
CURRENCY-NEUTRAL CORE EPS
 
 
0.95

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,620.9

 
 
 
 
 
 
 
 
 
 
*Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.
FY 18 CHANGE VERSUS YEAR AGO
 
 
CORE GROSS MARGIN
(150)
BPS
CORE SELLING GENRAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
(90)
BPS
CORE OPERATING PROFIT MARGIN
(50)
BPS
CORE EPS
11%
 
CURRENCY-NEUTRAL CORE EPS
12%
 







THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information & Non-GAAP Measures, Revised for the Retirement Benefits Accounting Change
Three Months Ended June 30, 2017
 
AS REVISED (GAAP)
 
INCREMENTAL RESTRUCTURING
 
ROUNDING
 
NON-GAAP (CORE)
COST OF PRODUCTS SOLD
8,325

 
(146
)
 
(1
)
 
8,178

GROSS PROFIT
7,754

 
146

 
1

 
7,901

GROSS MARGIN
48.2
%
 
0.9
%
 
%
 
49.1
%
SELLING, GENERAL, & ADMINISTRATIVE EXPENSE
4,854

 
20

 
1

 
4,875

SELLING, GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
30.2
%
 
0.1
%
 
%
 
30.3
%
OPERATING INCOME
2,900

 
126

 

 
3,026

OPERATING PROFIT MARGIN
18.0
%
 
0.8
%
 
%
 
18.8
%
INCOME TAX ON CONTINUING OPERATIONS
725

 
63

 
1

 
789

NET EARNINGS ATTRIBUTABLE TO P&G
2,215

 
65

 
(1
)
 
2,279

EFFECTIVE TAX RATE
24.8
%
 
1.0
%
 
%
 
25.8
%
 
 
 
 
 
 
 
Core EPS:
DILUTED NET EARNINGS PER COMMON SHARE*
0.82

 
0.02

 
0.01

 
0.85

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,695.6

 
 
 
 
 
 
*Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.









THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information & Non-GAAP Measures, Revised for the Retirement Benefits Accounting Change
Three Months Ended March 31, 2018
 
AS REVISED (GAAP)
 
INCREMENTAL RESTRUCTURING
 
TRANSITIONAL IMPACTS OF US TAX ACT
 
ROUNDING
 
NON-GAAP (CORE)
COST OF PRODUCTS SOLD
8,384

 
(110
)
 

 
(1
)
 
8,273

GROSS PROFIT
7,897

 
110

 

 
1

 
8,008

GROSS MARGIN
48.5
%
 
0.7
 %
 
 %
 
 %
 
49.2
%
SELLING, GENERAL, & ADMINISTRATIVE EXPENSE
4,688

 
(24
)
 

 

 
4,664

SELLING, GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
28.8
%
 
(0.1
)%
 
 %
 
(0.1
)%
 
28.6
%
OPERATING INCOME
3,209

 
134

 

 
1

 
3,344

OPERATING PROFIT MARGIN
19.7
%
 
0.8
 %
 
 %
 
 %
 
20.5
%
INCOME TAX ON CONTINUING OPERATIONS
713

 
22

 
(22
)
 
(1
)
 
712

NET EARNINGS ATTRIBUTABLE TO P&G
2,511

 
116

 
22

 

 
2,649

EFFECTIVE TAX RATE
21.9
%
 
(0.2
)%
 
(0.7
)%
 
 %
 
21
%
 
 
 
 
 
 
 
 
 
Core EPS:
DILUTED NET EARNINGS PER COMMON SHARE*
0.95

 
0.04

 
0.01

 

 
1.00

 
 
 
LESS: CURRENCY IMPACT TO EARNINGS
 
 
(0.03
)
 
 
 
 
 
CURRENCY-NEUTRAL CORE EPS
 
 
0.97

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,645.6

 
 
 
 
 
 
 
 
*Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.

FY 18 CHANGE VERSUS YEAR AGO
 
 
CORE GROSS MARGIN
(110)
BPS
CORE SELLING GENRAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
10
BPS
CORE OPERATING PROFIT MARGIN
(130)
BPS
CORE EPS
4%
 
CURRENCY-NEUTRAL CORE EPS
1%
 






THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information & Non-GAAP Measures, Revised for the Retirement Benefits Accounting Change
Three Months Ended March 31, 2017
 
AS REVISED (GAAP)
 
INCREMENTAL RESTRUCTURING
 
ROUNDING
 
NON-GAAP (CORE)
COST OF PRODUCTS SOLD
7,862

 
(113
)
 
1

 
7,750

GROSS PROFIT
7,743

 
113

 
(1
)
 
7,855

GROSS MARGIN
49.6
%
 
0.7
%
 
 %
 
50.3
%
SELLING, GENERAL, & ADMINISTRATIVE EXPENSE
4,432

 
24

 
(1
)
 
4,455

SELLING, GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
28.4
%
 
0.2
%
 
(0.1
)%
 
28.5
%
OPERATING INCOME
3,311

 
89

 

 
3,400

OPERATING PROFIT MARGIN
21.2
%
 
0.6
%
 
 %
 
21.8
%
INCOME TAX ON CONTINUING OPERATIONS
780

 
21

 
(1
)
 
800

NET EARNINGS ATTRIBUTABLE TO P&G
2,522

 
70

 

 
2,592

EFFECTIVE TAX RATE
23.4
%
 
%
 
 %
 
23.4
%
 
 
 
 
 
 
 
Core EPS:
DILUTED NET EARNINGS PER COMMON SHARE*
0.93

 
0.03

 

 
0.96

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,705.5

 
 
 
 
 
 
*Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.












THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information & Non-GAAP Measures, Revised for the Retirement Benefits Accounting Change
Three Months Ended December 31, 2017
 
AS REVISED (GAAP)
 
INCREMENTAL RESTRUCTURING
 
TRANSITIONAL IMPACTS OF US TAX ACT
 
ROUNDING
 
NON-GAAP (CORE)
COST OF PRODUCTS SOLD
8,709

 
(86
)
 

 
1

 
8,624

GROSS PROFIT
8,686

 
86

 

 
(1
)
 
8,771

GROSS MARGIN
49.9
%
 
0.5
 %
 
 %
 
%
 
50.4
%
SELLING, GENERAL, & ADMINISTRATIVE EXPENSE
4,767

 
19

 

 
(1
)
 
4,785

SELLING, GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
27.4
%
 
0.1
 %
 
 %
 
%
 
27.5
%
OPERATING INCOME
3,919

 
67

 

 

 
3,986

OPERATING PROFIT MARGIN
22.5
%
 
0.4
 %
 
 %
 
%
 
22.9
%
INCOME TAX ON CONTINUING OPERATIONS
1,472

 
21

 
(628
)
 

 
865

NET EARNINGS ATTRIBUTABLE TO P&G
2,495

 
51

 
628

 

 
3,174

EFFECTIVE TAX RATE
36.5
%
 
(0.1
)%
 
(15.3
)%
 
%
 
21.1
%
 
 
 
 
 
 
 
 
 
Core EPS:
DILUTED NET EARNINGS PER COMMON SHARE*
0.93

 
0.02

 
0.24

 

 
1.19

 
 
 
LESS: CURRENCY IMPACT TO EARNINGS
 
 
(0.04
)
 
 
 
 
 
CURRENCY-NEUTRAL CORE EPS
 
 
1.15

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,669.6

 
 
 
 
 
 
 
 
*Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.
FY 18 CHANGE VERSUS YEAR AGO
 
 
CORE GROSS MARGIN
(100)
BPS
CORE SELLING GENRAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
(70)
BPS
CORE OPERATING PROFIT MARGIN
(30)
BPS
CORE EPS
10%
 
CURRENCY-NEUTRAL CORE EPS
6%
 








THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information & Non-GAAP Measures, Revised for the Retirement Benefits Accounting Change
Three Months Ended December 31, 2016
 
AS REVISED (GAAP)
 
DISCONTINUED OPERATIONS
 
INCREMENTAL RESTRUCTURING
 
EARLY DEBT EXTINGUISHMENT
 
ROUNDING
 
NON-GAAP (CORE)
COST OF PRODUCTS SOLD
8,323

 

 
(128
)
 

 

 
8,195

GROSS PROFIT
8,533

 

 
128

 

 

 
8,661

GROSS MARGIN
50.6
%
 
%
 
0.8
%
 
%
 
%
 
51.4
%
SELLING, GENERAL, & ADMINISTRATIVE EXPENSE
4,706

 

 
38

 

 
1

 
4,745

SELLING, GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
27.9
%
 
%
 
0.2
%
 
%
 
0.1
%
 
28.2
%
OPERATING INCOME
3,827

 

 
90

 

 
(1
)
 
3,916

OPERATING PROFIT MARGIN
22.7
%
 
%
 
0.5
%
 
%
 
%
 
23.2
%
INCOME TAX ON CONTINUING OPERATIONS
695

 

 
21

 
198

 
(1
)
 
913

NET EARNINGS ATTRIBUTABLE TO P&G
7,875

 
(5,335
)
 
71

 
345

 
 
 
2,956

EFFECTIVE TAX RATE
21.3
%
 
%
 
%
 
2.2
%
 
%
 
23.5
%
 
 
 
 
 
 
 
 
 
 
 
Core EPS:
DILUTED NET EARNINGS PER COMMON SHARE*
2.88

 
(1.95
)
 
0.03

 
0.13

 
(0.01
)
 
1.08

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,737.6

 
 
 
 
 
 
 
 
 
 
*Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.









THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information & Non-GAAP Measures, Revised for the Retirement Benefits Accounting Change
Three Months Ended September 30, 2017
 
AS REVISED (GAAP)
 
INCREMENTAL RESTRUCTURING
 
ROUNDING
 
NON-GAAP (CORE)
COST OF PRODUCTS SOLD
8,269

 
(100
)
 

 
8,169

GROSS PROFIT
8,384

 
100

 

 
8,484

GROSS MARGIN
50.3
%
 
0.6
 %
 
%
 
50.9
%
SELLING, GENERAL, & ADMINISTRATIVE EXPENSE
4,736

 
7

 

 
4,743

SELLING, GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
28.4
%
 
 %
 
0.1
%
 
28.5
%
OPERATING INCOME
3,648

 
93

 

 
3,741

OPERATING PROFIT MARGIN
21.9
%
 
0.6
 %
 
%
 
22.5
%
INCOME TAX ON CONTINUING OPERATIONS
881

 
20

 

 
901

NET EARNINGS ATTRIBUTABLE TO P&G
2,853

 
75

 

 
2,928

EFFECTIVE TAX RATE
23.5
%
 
(0.1
)%
 
%
 
23.4
%
 
 
 
 
 
 
 
Core EPS:
DILUTED NET EARNINGS PER COMMON SHARE*
1.06

 
0.03

 

 
1.09

 
LESS: CURRENCY IMPACT TO EARNINGS
 
 

 
 
 
CURRENCY-NEUTRAL CORE EPS
 
 
1.09

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,690.6

 
 
 
 
 
 
*Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.
FY 18 CHANGE VERSUS YEAR AGO
 
 
CORE GROSS MARGIN
(60)
BPS
CORE SELLING GENRAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
10
BPS
CORE OPERATING PROFIT MARGIN
(60)
BPS
CORE EPS
6%
 
CURRENCY-NEUTRAL CORE EPS
6%
 






THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information & Non-GAAP Measures, Revised for the Retirement Benefits Accounting Change
Three Months Ended September 30, 2016
 
AS REVISED (GAAP)
 
DISCONTINUED OPERATIONS
 
INCREMENTAL RESTRUCTURING
 
ROUNDING
 
NON-GAAP (CORE)
COST OF PRODUCTS SOLD
8,128

 

 
(111
)
 

 
8,017

GROSS PROFIT
8,390

 

 
111

 

 
8,501

GROSS MARGIN
50.8
%
 
%
 
0.7
 %
 
%
 
51.5
%
SELLING, GENERAL, & ADMINISTRATIVE EXPENSE
4,662

 

 
25

 
(1
)
 
4,686

SELLING, GENERAL & ADMINISTRATIVE EXPENSE AS A % OF NET SALES
28.2
%
 
%
 
0.2
 %
 
%
 
28.4
%
OPERATING INCOME
3,728

 

 
86

 
1

 
3,815

OPERATING PROFIT MARGIN
22.6
%
 
%
 
0.5
 %
 
%
 
23.1
%
INCOME TAX ON CONTINUING OPERATIONS
863

 

 
15

 
1

 
879

NET EARNINGS ATTRIBUTABLE TO P&G
2,714

 
118

 
73

 

 
2,905

EFFECTIVE TAX RATE
23.1
%
 
%
 
(0.1
)%
 
%
 
23
%
 
 
 
 
 
 
 
 
 
Core EPS:
DILUTED NET EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS*
0.96

 
0.04

 
0.03

 

 
1.03

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
2,822.9

 
 
 
 
 
 
 
 
*Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.








SIGNATURE 

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 hereunto duly authorized.

THE PROCTER & GAMBLE COMPANY
BY:
/s/ Sandra T. Lane
 
Sandra T. Lane, Assistant Secretary
 
October 10, 2018



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