Toggle SGML Header (+)


Section 1: 8-K (DEUTSCHE BANK 2019 CONFERENCE)



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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):  June 13, 2019

 
 
THE PROCTER & GAMBLE COMPANY
(Exact Name of Registrant as Specified in Charter) 

 

  
 
 
 
 
 Ohio
 
 1-434
 
 31-0411980
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 
 

 
 
One Procter & Gamble Plaza, Cincinnati, Ohio 45202
(Address of Principal Executive Offices, and Zip Code)

 
513-983-1100
Registrant’s Telephone Number, Including Area Code

 
 (Former Name or Former Address, if Changed Since Last Report) 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 


Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
 Common Stock, without Par Value
 PG  New York Stock Exchange


 
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 tramsition 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
 
On June 13, 2019, The Procter & Gamble Company (the "Company") participated in the Deutsche Bank dbAccess Global Consumer Conference. The Company is furnishing on this Form 8-K a slide referenced in the Company's remarks at the conference.
 
This 8-K is being furnished pursuant to Item 7.01, "Regulation FD Disclosure."
 
ITEM 9.01    FINANCIAL STATEMENTS AND EXHIBITS
 
(d) Exhibits
 
Exhibit Number
 
Description
99.1
 
Informational Slide Provided by The Procter & Gamble Company dated June 13, 2019
 
 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
              June 13, 2019





INDEX TO EXHIBIT(S)
 
Exhibit Number
 
Description
 
 





























(Back To Top)

Section 2: EX-99.1 CHARTER (DEUTSCHE BANK DBACCESS GLOBAL CONSUMER CONFERENCE INFORMATIONAL SLIDE)


   FY 2019 YEAR-TO-DATE RESULTS (Q1-Q3 FY ’19)     *Updated in Q3 FY ‘19 Earnings Call on 4/23/19    GOING IN GUIDANCE  FYTD ’19 (through Q3)    CURRENT GUIDANCE*  Organic Sales  2 to 3%   +4%     Solid +4%  Core EPS  3 to 8%  +4%    3 to 8%  Currency Neutral Core EPS     +13%      Adjusted Free Cash Flow Productivity  90%   99%    At least 100%  Cash Returned to Shareholders  Up to $12bn   ~$9bn    Up to $12bn  Note: YTD throughout presentation refers to Q1-Q3 FY ’19 reported results 
 

The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures

In accordance with the SEC's Regulation G, the following provides definitions of the non-GAAP measures used in Procter & Gamble's June 13, 2019 Deutsche Bank Conference, associated slides, and other materials and the reconciliation to the most closely related GAAP measure. We believe that these measures provide useful perspective on underlying business trends (i.e. trends excluding non-recurring or unusual items) and results and provide a supplemental measure of year-on-year results. The non-GAAP measures described below are used by Management in making operating decisions, allocating financial resources and for business strategy purposes. These measures may be useful to investors as they provide supplemental information about business performance and provide investors a view of our business results through the eyes of Management. Certain of these measures are also used to evaluate senior management and are a factor in determining their at-risk compensation. These non-GAAP measures are not intended to be considered by the user in place of the related GAAP measure, but rather as supplemental information to our business results.  These non-GAAP measures may not be the same as similar measures used by other companies due to possible differences in method and in the items or events being adjusted. The Company is not able to reconcile its forward-looking non-GAAP cash flow measure because the Company cannot predict the timing and amounts of discrete items such as acquisition and divestitures, which could significantly impact GAAP results.

The measures provided are as follows:
1.
Organic sales growth — page 3
2.
Core EPS and currency-neutral Core EPS — page 3
3.
Adjusted free cash flow productivity – page 4

Organic sales growth*:  Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions and divestitures, the impact from the July 1, 2018 adoption of new accounting standards for “Revenue from Contracts with Customers”, the impact from India Goods and Services Tax changes (which were effective on July 1, 2017) and foreign exchange from year-over-year comparisons. Management believes this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis.

The Core earnings 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 included incremental restructuring activities.  In 2017, the Company 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.
Gain on Dissolution of the PGT Healthcare Partnership: The Company finalized the dissolution of our PGT Healthcare partnership, a venture between the Company and Teva Pharmaceuticals Industries, Ltd (Teva) in the OTC consumer healthcare business, in the quarter ended September 30, 2018. The transaction was accounted for as a sale of the Teva portion of the PGT business; the Company recognized an after-tax gain on the dissolution of $353 million.

We do not view the above items to be part of our sustainable results, and their exclusion from core earnings 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. Management views the following non-GAAP measures as useful supplemental measures of Company performance and 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.

Adjusted free cash flow:  Adjusted free cash flow is defined as operating cash flow less capital spending and adjustments for items as indicated. Adjusted free cash flow represents the cash that the Company is able to generate after taking into account planned maintenance and asset expansion.  Management views adjusted free cash flow as an important measure because it is one factor used in determining the amount of cash available for dividends, share repurchases, acquisitions and other discretionary investment.

Adjusted free cash flow productivity*:  Adjusted free cash flow productivity is defined as the ratio of adjusted free cash flow to net earnings adjusted for items as indicated.  Management views adjusted free cash flow productivity as a useful measure to help investors understand P&G’s ability to generate cash. Adjusted free cash flow productivity is used by management in making operating decisions, allocating financial resources and for budget planning purposes.  The Company's long-term target is to generate annual free cash flow productivity at or above 90 percent.


* Measure is used to evaluate senior management and is a factor in determining their at-risk compensation.

1. Organic sales growth:

 
Total Company
Net Sales Growth
 
Foreign Exchange Impact
 
Acquisition/ Divestiture Impact/Other*
 
Organic Sales Growth
FYTD JFM 2019
1%
 
3%
 
-%
 
4%
* Acquisition & Divestiture Impact/Other includes the volume and mix impact of acquisitions and divestitures for all periods, the impact from the July 1, 2018 adoption of new accounting standards for "Revenue from Contracts with Customers" and rounding impacts necessary to reconcile net sales to organic sales.



Organic Sales
Guidance
Total Company
 
Net Sales Growth
 
Combined Foreign Exchange &
Acquisition/Divestiture Impact/Other*
 
Organic Sales Growth
FY 2019 (Estimate)
 
-% to 1%
 
3% to 4%
 
+4%
* Acquisition & Divestiture Impact/Other includes the volume and mix impact of acquisitions and divestitures, the impact from the July 1, 2018 adoption of new accounting standards for "Revenue from Contracts with Customers" and rounding impacts necessary to reconcile net sales to organic sales.



2. Core EPS and currency-neutral Core EPS: 
 
Nine Months Ended
March 31
 
2019
 
2018
Diluted Net Earnings Per Share from Continuing Operations
$3.48
 
$2.94
  Incremental Restructuring
0.07
 
0.09
  Transitional Impacts of the US Tax Act
-
 
0.24
  Gain on Dissolution of PGT Partnership
(0.13)
 
-
  Rounding
   
0.01
Core EPS
$3.42
 
$3.28
Percentage change vs. prior period
4%
   
Currency Impact to Earnings
0.28
   
Currency-Neutral Core EPS
$3.70
   
Percentage change vs. prior period Core EPS
13%
   

Note – All reconciling items are presented net of tax. Tax effects are calculated consistent with the nature of the underlying transaction.



Core EPS
Guidance
Total Company
Diluted EPS Growth
Impact of Incremental
Non-Core Items*
Core EPS Growth
FY 2019 (Estimate)
+17% to +24%
(14)% to (16)%
+3% to +8%
* Includes the gain on the dissolution of the PGT Healthcare partnership in FY 2019 and the impact of U.S. Tax Act and loss on early extinguishment of debt in FY 2018 and year-over-year changes in incremental non-core restructuring charges.



3. Adjusted free cash flow productivity (dollar amounts in millions): 

Nine Months Ended March 31, 2019
Operating Cash Flow
Capital Spending
U.S. Tax Act Payments
Adjusted Free Cash Flow
Net Earnings
Gain on Dissolution of PGT Partnership
Adjusted Net Earnings
Adjusted Free Cash Flow Productivity
$11,091
$(2,533)
$235
$8,793
$9,203
$(353)
$8,850
99%


(Back To Top)