01—Abstract
Summary
Summary of the 8-K filed February 10, 2012. Cited figures are marked; the original filing is the authoritative source.
The Procter & Gamble Company (PG) filed an 8-K on February 10, 2012, to disclose significant changes in its segment reporting structure and the presentation of noncontrolling interests, effective for the second quarter of fiscal year 2012.
These changes are primarily aimed at providing clearer and more transparent financial reporting for investors. The company has reclassified certain product lines between its Beauty and Grooming Global Business Units (GBUs), transitioning from consumer-oriented to product-oriented segment reporting. Specifically, female blades and razors have moved from Beauty to Grooming, while Old Spice and Gillette male personal care products have moved from Grooming to Beauty.
Furthermore, P&G is now presenting noncontrolling interests separately in its Consolidated Statements of Earnings, a change implemented due to increased transparency rather than a material impact on net earnings or EPS. While historical financial statements have been revised to conform to this new presentation, the underlying net earnings attributable to Procter & Gamble and earnings per share remain unchanged. Investors should note that this 8-K revises historical segment disclosures and the presentation of noncontrolling interests, but the financial information generally reflects the status as of the filing date of the 2011 10-K (August 10, 2011) and does not include subsequent events.
02—Key points
Key Highlights
- Procter & Gamble (PG) is changing its segment reporting from consumer-oriented to product-oriented for the Beauty and Grooming GBUs, effective Q2 FY2012.
- Female blades and razors will now be reported under the Grooming segment, moving from Beauty.
- Old Spice and Gillette male personal care products are being moved from the Grooming segment to the Beauty segment.
- The company is enhancing transparency by separately presenting net expense for earnings attributable to noncontrolling interests in its Consolidated Statements of Earnings, effective Q2 FY2012.
- Historical financial statements (FY2011, 2010, 2009) are being revised to reflect these new segment and noncontrolling interest presentation changes.
- These presentation changes do not impact historically reported net earnings attributable to P&G or basic/diluted earnings per share.
- The filing revises historical segment disclosures and noncontrolling interest presentation but does not update for events subsequent to the August 10, 2011, 10-K filing.
03—Questions
Frequently Asked Questions
Why is P&G changing its segment reporting structure?
P&G is shifting its Beauty and Grooming Global Business Units (GBUs) from a consumer-oriented to a product-oriented segment breakout. This change is intended to provide a clearer and more transparent view of its business segments for investors and stakeholders.
What specific product lines are being moved between segments?
Female blades and razors are transitioning from the Beauty segment to the Grooming segment. Conversely, Old Spice and Gillette male personal care products are moving from the Grooming segment to the Beauty segment.
How will the changes in segment reporting affect reported earnings?
The changes in segment reporting, including the reclassification of products and the separate presentation of noncontrolling interests, are primarily presentation changes. They do not impact the historically reported net earnings attributable to Procter & Gamble or the historical basic or diluted net earnings per share.
What is the significance of the change in how noncontrolling interests are presented?
P&G is now presenting the net expense for earnings attributable to noncontrolling interests separately in its Consolidated Statements of Earnings. This change aims to provide greater transparency, though it was previously deemed immaterial and included within other non-operating income/(expense).
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