01—Abstract
Summary
Summary of the 8-K filed January 29, 2010. Cited figures are marked; the original filing is the authoritative source.
The Procter & Gamble Company (PG) filed a Current Report (8-K) on January 29, 2010, primarily to restate previously issued financial information.
This restatement is due to two significant events: the divestiture of its global pharmaceuticals business in October 2009 and a restructuring of its Beauty Global Business Unit (GBU) effective July 1, 2009. Investors should note that the sale of the pharmaceuticals business for $2.8 billiona has led to its classification as discontinued operations, requiring the exclusion of its results from continuing operations and segment reporting for prior fiscal years (2007-2009). Furthermore, the company has realigned its Beauty and Grooming segments, reclassifying certain product lines like female blades and razors, and male-focused brands such as Old Spice and Gillette personal care.
This restructuring necessitates revised financial statements and Management's Discussion and Analysis (MD&A) to reflect the new organizational structure and segment reporting. The filing provides updated financial statements and MD&A to account for these changes, ensuring greater clarity and accuracy in financial reporting for the affected periods.
02—Key points
Key Highlights
- Procter & Gamble has divested its global pharmaceuticals business to Warner Chilcott for $2.8 billion.
- The pharmaceuticals business is now classified as discontinued operations in financial reporting.
- Financial statements and MD&A for fiscal years 2007, 2008, and 2009 have been restated to exclude the pharmaceuticals business.
- The company has restructured its Beauty Global Business Unit (GBU) effective July 1, 2009.
- Reportable segments have been realigned under the new Beauty and Grooming GBU structure.
- Certain product lines (e.g., female blades/razors) have moved between Beauty and Grooming segments.
- Revised financial statements and MD&A are provided to reflect these organizational and segment changes.
03—Questions
Frequently Asked Questions
What was the primary reason for filing this 8-K report?
This 8-K was filed to provide restated financial information. This includes updating the Management's Discussion and Analysis (MD&A) and Consolidated Financial Statements to reflect the divestiture of the global pharmaceuticals business and a significant restructuring of the Beauty Global Business Unit (GBU).
How will the sale of the pharmaceuticals business impact P&G's reported financials?
The sale of the pharmaceuticals business, completed in October 2009 for $2.8 billion, is being presented as discontinued operations. Consequently, the historical financial results of this business have been excluded from both continuing operations and segment results for the fiscal years 2007, 2008, and 2009.
What changes were made to P&G's segment reporting?
Effective July 1, 2009, P&G restructured its Beauty GBU, renaming it the Beauty and Grooming GBU. This led to a realignment of its reportable segments. Specifically, female blades and razors moved from the Grooming segment to Beauty, while certain male-focused brands like Old Spice and Gillette personal care transitioned from Beauty to Grooming.
What is the significance of the restated financial statements for investors?
The restated financial statements and MD&A provide a more accurate and consistent view of P&G's ongoing operations by removing the impact of the divested pharmaceuticals business and reflecting the current organizational structure. This allows investors to better analyze the performance of the continuing core businesses and understand segment contributions under the new alignment.
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