01—Abstract
Summary
Summary of the 8-K filed February 10, 2009. Cited figures are marked; the original filing is the authoritative source.
Procter & Gamble (PG) filed an 8-K on February 10, 2009, to report on the financial impact of its coffee business divestiture.
The company completed the merger of its Folgers coffee subsidiary into The J.M. Smucker Company in November 2008, structured as an all-stock reverse Morris Trust transaction. This transaction involved P&G shareholders tendering their shares in exchange for Folgers stock, with Folgers subsequently becoming a wholly owned subsidiary of Smucker.
As a result of this divestiture, P&G is now required to present the results of its former coffee business, Folgers, as discontinued operations in its financial statements, in accordance with SFAS No. 144. This means that the financial performance of Folgers will be excluded from both continuing operations and segment results for prior periods, specifically the fiscal years ended June 30, 2008, 2007, and 2006. The 8-K filing includes revised financial statements, accompanying footnotes, and Management's Discussion and Analysis (MD&A) to reflect this change.
02—Key points
Key Highlights
- Procter & Gamble (PG) completed the divestiture of its Folgers coffee business in November 2008.
- The transaction was structured as an all-stock reverse Morris Trust merger with The J.M. Smucker Company.
- P&G shareholders exchanged P&G common stock for Folgers common stock.
- The Folgers business will now be reported as discontinued operations.
- Revised financial statements and MD&A are being provided to reflect the exclusion of Folgers from continuing operations and segment results for fiscal years 2008, 2007, and 2006.
- The filing includes amended financial statements, footnotes, and an updated accountant's report.
03—Questions
Frequently Asked Questions
What was the main event reported in this 8-K filing?
The main event reported is the financial accounting impact of Procter & Gamble's divestiture of its coffee business (Folgers) through a merger with The J.M. Smucker Company, which was completed in November 2008. This filing provides revised financial statements to reflect Folgers as discontinued operations.
Why is the coffee business being reported as discontinued operations?
The coffee business is being reported as discontinued operations in accordance with SFAS No. 144, 'Accounting for the Impairment or Disposal of Long-Lived Assets,' because the company has completed its divestiture through a merger with J.M. Smucker.
What are the implications of reporting Folgers as discontinued operations for P&G's financial statements?
Reporting Folgers as discontinued operations means its historical financial results will be excluded from P&G's continuing operations and segment reporting for the years ended June 30, 2008, 2007, and 2006. This provides a clearer view of the performance of P&G's ongoing businesses.
What specific documents are included with this 8-K filing?
This 8-K filing includes revised Management's Discussion and Analysis (MD&A), revised Consolidated Financial Statements and accompanying footnotes, an updated report from the independent registered public accountant (Deloitte & Touche LLP), and the consent of the accountant.
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