PROCTER & GAMBLE Co 10-Q for FY2020 Q2

PROCTER & GAMBLE Co (PG)

10-Q 2020-01-23 For: 2019-12-31

Added on April 09, 2026

About this 10-Q

PROCTER & GAMBLE Co filed this 10-Q on January 23, 2020, covering the quarter ended December 31, 2019 (FY2020 Q2).

Headline figures

Quarter ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $18.24B; up 4.6% from $17.44B a year earlier
Net income: $3.74B; up 16.4% from net income of $3.22B a year earlier
Diluted EPS: $1.41; up 15.6% from $1.22 a year earlier

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Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, without Par Value	PG	NYSE
4.125% EUR notes due December 2020	PG20A	NYSE
0.275% Notes due 2020	PG20	NYSE
2.000% Notes due 2021	PG21	NYSE
2.000% Notes due 2022	PG22B	NYSE
1.125% Notes due 2023	PG23A	NYSE
0.500% Notes due 2024	PG24A	NYSE
0.625% Notes due 2024	PG24B	NYSE
1.375% Notes due 2025	PG25	NYSE
4.875% EUR notes due May 2027	PG27A	NYSE
1.200% Notes due 2028	PG28	NYSE
1.250% Notes due 2029	PG29B	NYSE
1.800% Notes due 2029	PG29A	NYSE
6.250% GBP notes due January 2030	PG30	NYSE
5.250% GBP notes due January 2033	PG33	NYSE
1.875% Notes due 2038	PG38	NYSE


	Three Months Ended December 31						Six Months Ended December 31
Amounts in millions except per share amounts	2019		2018		2019		2018
NET SALES	$	18,240	$	17,438	$	36,038	$	34,128
Cost of products sold	8,869		8,919		17,592		17,403
Selling, general and administrative expense	4,889		4,623		9,674		9,275
OPERATING INCOME	4,482		3,896		8,772		7,450
Interest expense	(100)		(138)		(208)		(267)
Interest income	36		63		94		116
Other non-operating income, net	114		95		217		557
EARNINGS BEFORE INCOME TAXES	4,532		3,916		8,875		7,856
Income taxes	789		700		1,515		1,429
NET EARNINGS	3,743		3,216		7,360		6,427
Less: Net earnings attributable to noncontrolling interests	26		22		50		34
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE	$	3,717	$	3,194	$	7,310	$	6,393

NET EARNINGS PER SHARE ⁽¹⁾
Basic	$	1.47	$	1.25	$	2.88	$	2.51
Diluted	$	1.41	$	1.22	$	2.77	$	2.44

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	2,630.1		2,623.0		2,638.8		2,617.6


	Three Months Ended December 31						Six Months Ended December 31
Amounts in millions	2019		2018		2019		2018
NET EARNINGS	$	3,743	$	3,216	$	7,360	$	6,427
OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX
Foreign currency translation	392		(178)		(148)		(387)
Unrealized gains/(losses) on investment securities	(1)		58		(6)		53
Unrealized gains/(losses) on defined benefit retirement plans	(37)		98		142		250
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX	354		(22)		(12)		(84)
TOTAL COMPREHENSIVE INCOME	4,097		3,194		7,348		6,343
Less: Total comprehensive income attributable to noncontrolling interests	24		23		44		31
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE	$	4,073	$	3,171	$	7,304	$	6,312


Amounts in millions			December 31, 2019				June 30, 2019
Assets
CURRENT ASSETS
Cash and cash equivalents			$	6,279			$	4,239
Available-for-sale investment securities			—				6,048
Accounts receivable			5,196				4,951
INVENTORIES
Materials and supplies			1,458				1,289
Work in process			632				612
Finished goods			3,431				3,116
Total inventories			5,521				5,017
Prepaid expenses and other current assets			1,921				2,218
TOTAL CURRENT ASSETS			18,917				22,473
PROPERTY, PLANT AND EQUIPMENT, NET			21,250				21,271
GOODWILL			39,998				40,273
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET					23,980				24,215
OTHER NONCURRENT ASSETS			7,578				6,863
TOTAL ASSETS			$	111,723			$	115,095

Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Accounts payable			$	10,781			$	11,260
Accrued and other liabilities			10,230				9,054
Debt due within one year			9,153				9,697
TOTAL CURRENT LIABILITIES			30,164				30,011
LONG-TERM DEBT			18,985				20,395
DEFERRED INCOME TAXES			6,242				6,899
OTHER NONCURRENT LIABILITIES			10,424				10,211
TOTAL LIABILITIES			65,815				67,516
SHAREHOLDERS’ EQUITY
Preferred stock			911				928
Common stock – shares issued –	December 2019	4,009.2
	June 2019	4,009.2	4,009				4,009
Additional paid-in capital			64,019				63,827
Reserve for ESOP debt retirement			(1,112)				(1,146)
Accumulated other comprehensive income/(loss)			(14,942)				(14,936)
Treasury stock			(105,761)				(100,406)
Retained earnings			98,414				94,918
Noncontrolling interest			370				385
TOTAL SHAREHOLDERS’ EQUITY			45,908				47,579
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY					$	111,723			$	115,095


	Three Months Ended December 31, 2019
Dollars in millions; shares in thousands	Common Stock			Preferred Stock	Add-itional Paid-In Capital	Reserve for ESOP Debt Retirement	Accumu-lated Other Comp-rehensive Income/(Loss)	Treasury Stock	Retained Earnings	Non-controlling Interest	Total Share-holders' Equity
		Shares	Amount
BALANCE SEPTEMBER 30, 2019	2,493,812	$4,009	$915	$63,949	($1,112)	($15,298)	($102,510)	$96,625	$406	$46,984
Net earnings								3,717	26	3,743
Other comprehensive income/(loss)						356			(2)	354
Dividends and dividend equivalents ($0.7459 per share):
Common								(1,863)		(1,863)
Preferred, net of tax benefits								(64)		(64)
Treasury stock purchases	(28,628)						(3,504)			(3,504)
Employee stock plans	3,681			69			250			319
Preferred stock conversions	588		(4)	1			3			—
ESOP debt impacts					—			(1)		(1)
Noncontrolling interest, net				—					(60)	(60)
BALANCE DECEMBER 31, 2019	2,469,453	$4,009	$911	$64,019	($1,112)	($14,942)	($105,761)	$98,414	$370	$45,908


x			True			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			False			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Six Months Ended December 31, 2019
Dollars in millions; shares in thousands	Common Stock			Preferred Stock	Add-itional Paid-In Capital	Reserve for ESOP Debt Retirement	Accumu-lated Other Comp-rehensive Income/(Loss)	Treasury Stock	Retained Earnings	Non-controlling Interest	Total Share-holders' Equity
		Shares	Amount
BALANCE JUNE 30, 2019	2,504,751	$4,009	$928	$63,827	($1,146)	($14,936)	($100,406)	$94,918	$385	$47,579
Net earnings								7,310	50	7,360
Other comprehensive income/(loss)						(6)			(6)	(12)
Dividends and dividend equivalents ($1.4918 per share)
Common								(3,737)		(3,737)
Preferred, net of tax benefits								(129)		(129)
Treasury stock purchases	(54,033)						(6,504)			(6,504)
Employee stock plans	16,731			189			1,135			1,324
Preferred stock conversions	2,004		(17)	3			14			—
ESOP debt impacts					34			52		86
Noncontrolling interest, net				—					(59)	(59)
BALANCE DECEMBER 31, 2019	2,469,453	$4,009	$911	$64,019	($1,112)	($14,942)	($105,761)	$98,414	$370	$45,908


	Three Months Ended December 31, 2018
Dollars in millions; shares in thousands	Common Stock			Preferred Stock	Add-itional Paid-In Capital	Reserve for ESOP Debt Retirement	Accumu-lated Other Comp-rehensive Income/(Loss)	Treasury Stock	Retained Earnings	Non-controlling Interest	Total Share-holders' Equity
		Shares	Amount
BALANCE SEPTEMBER 30, 2018	2,491,408	$4,009	$951	$63,711	($1,177)	($15,133)	($99,956)	$99,831	$268	$52,504
Net earnings								3,194	22	3,216
Other comprehensive income/(loss)						(23)			1	(22)
Dividends and dividend equivalents ($0.7172 per share):
Common								(1,790)		(1,790)
Preferred, net of tax benefits								(65)		(65)
Treasury stock purchases	(8,647)						(751)			(751)
Employee stock plans	18,021			(73)			1,222			1,149
Preferred stock conversions	798		(5)	—			5			—
ESOP debt impacts					(1)			—		(1)
Noncontrolling interest, net				41					162	203
BALANCE DECEMBER 31, 2018	2,501,580	$4,009	$946	$63,679	($1,178)	($15,156)	($99,480)	$101,170	$453	$54,443


	Six Months Ended December 31, 2018
Dollars in millions; shares in thousands	Common Stock			Preferred Stock	Add-itional Paid-In Capital	Reserve for ESOP Debt Retirement	Accumu-lated Other Comp-rehensive Income/(Loss)	Treasury Stock	Retained Earnings	Non-controlling Interest	Total Share-holders' Equity
		Shares	Amount
BALANCE JUNE 30, 2018	2,498,093	$4,009	$967	$63,846	($1,204)	($14,749)	($99,217)	$98,641	$590	$52,883
Impact of adoption of new accounting standards						(326)		(200)	(27)	(553)
Net earnings								6,393	34	6,427
Other comprehensive income/(loss)						(81)			(3)	(84)
Dividends and dividend equivalents ($1.4344 per share):
Common								(3,581)		(3,581)
Preferred, net of tax benefits								(131)		(131)
Treasury stock purchases	(24,337)						(2,003)			(2,003)
Employee stock plans	25,389			(53)			1,722			1,669
Preferred stock conversions	2,435		(21)	3			18			—
ESOP debt impacts					26			48		74
Noncontrolling interest, net				(117)					(141)	(258)
BALANCE DECEMBER 31, 2018	2,501,580	$4,009	$946	$63,679	($1,178)	($15,156)	($99,480)	$101,170	$453	$54,443


	% of Net sales by operating segment ⁽¹⁾
	Three Months Ended December 31			Six Months Ended December 31
	2019	2018	2019	2018
Fabric Care	22%	22%	22%	22%
Baby Care	11%	12%	11%	12%
Home Care	10%	10%	10%	10%
Hair Care	10%	9%	10%	10%
Skin and Personal Care	10%	10%	10%	10%
Family Care	8%	9%	9%	9%
Oral Care	9%	9%	8%	8%
Shave Care	7%	7%	7%	8%
Feminine Care	6%	6%	6%	6%
Personal Health Care	5%	4%	5%	4%
Other	2%	2%	2%	1%
Total	100%	100%	100%	100%


	Beauty		Grooming		Health Care		Fabric & Home Care		Baby, Feminine & Family Care		Total Company
Goodwill at June 30, 2019	$	12,985	$	12,881	$	7,972	$	1,855	$	4,580	$	40,273
Acquisitions and divestitures	(1)		—		(55)		—		—		(56)
Translation and other	(82)		(48)		(56)		(8)		(25)		(219)
Goodwill at December 31, 2019	$	12,902	$	12,833	$	7,861	$	1,847	$	4,555	$	39,998


	Gross Carrying Amount		Accumulated Amortization
Intangible assets with determinable lives	$	8,509	$	(5,556)
Intangible assets with indefinite lives	21,027		—
Total identifiable intangible assets	$	29,536	$	(5,556)


	Approximate Percent Change in Estimated Fair Value
	+25 bps Discount Rate		-25 bps Growth Rates
Shave Care goodwill reporting unit	(6)	%	(6)	%
Gillette indefinite-lived intangible asset	(6)	%	(6)	%


CONSOLIDATED AMOUNTS	Three Months Ended December 31						Six Months Ended December 31
	2019		2018		2019		2018
Net earnings	$	3,743	$	3,216	$	7,360	$	6,427
Less: Net earnings attributable to noncontrolling interests	26		22		50		34
Net earnings attributable to P&G (Diluted)	3,717		3,194		7,310		6,393
Preferred dividends	(64)		(65)		(129)		(131)
Net earnings attributable to P&G available to common shareholders (Basic)	$	3,653	$	3,129	$	7,181	$	6,262

SHARES IN MILLIONS
Basic weighted average common shares outstanding	2,487.0		2,499.7		2,495.5		2,497.8
Add: Effect of dilutive securities
Conversion of preferred shares ⁽¹⁾	86.4		90.7		86.9		91.3
Impact of stock options and other unvested equity awards ⁽²⁾	56.7		32.6		56.4		28.5
Diluted weighted average common shares outstanding	2,630.1		2,623.0		2,638.8		2,617.6

NET EARNINGS PER SHARE ⁽³⁾
Basic	$	1.47	$	1.25	$	2.88	$	2.51
Diluted	$	1.41	$	1.22	$	2.77	$	2.44


Item 1.			Financial Statements


	Six Months Ended December 31
Amounts in millions	2019		2018
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD	$	4,239	$	2,569
OPERATING ACTIVITIES
Net earnings	7,360		6,427
Depreciation and amortization	1,400		1,293
Share-based compensation expense	202		181
Deferred income taxes	(549)		37
Gain on sale of assets	(13)		(370)
Changes in:
Accounts receivable	(257)		(398)
Inventories	(533)		(531)
Accounts payable, accrued and other liabilities	958		1,141
Other operating assets and liabilities	(55)		(370)
Other	20		164
TOTAL OPERATING ACTIVITIES	8,533		7,574
INVESTING ACTIVITIES
Capital expenditures	(1,684)		(1,781)
Proceeds from asset sales	15		18
Acquisitions, net of cash acquired	(54)		(3,848)
Purchases of short-term investments	—		(158)
Proceeds from sales and maturities of investment securities	6,151		1,117
Change in other investments	1		(58)
TOTAL INVESTING ACTIVITIES	4,429		(4,710)
FINANCING ACTIVITIES
Dividends to shareholders	(3,855)		(3,703)
(Reductions)/increases in short-term debt	(68)		1,206
Additions to long-term debt	—		2,368
Reductions to long-term debt	(1,546)		(978)
Treasury stock purchases	(6,504)		(2,003)
Impact of stock options and other	1,060		1,486
TOTAL FINANCING ACTIVITIES	(10,913)		(1,624)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(9)		(113)
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	2,040		1,127
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD	$	6,279	$	3,696


		Three Months Ended December 31										Six Months Ended December 31
		Net Sales		Earnings/(Loss) Before Income Taxes		Net Earnings		Net Sales		Earnings/(Loss) Before Income Taxes		Net Earnings
Beauty	2019	$	3,598	$	1,072	$	858	$	7,150	$	2,164	$	1,732
	2018	3,357		964		772		6,646		1,911		1,531
Grooming	2019	1,648		494		411		3,179		920		764
	2018	1,617		448		378		3,179		865		718
Health Care	2019	2,530		732		571		4,751		1,272		972
	2018	2,220		669		520		4,065		1,109		852
Fabric & Home Care	2019	5,787		1,278		975		11,619		2,616		2,003
	2018	5,557		1,134		860		11,045		2,278		1,737
Baby, Feminine & Family Care	2019	4,582		1,076		822		9,149		2,210		1,693
	2018	4,558		930		707		8,948		1,832		1,399
Corporate	2019	95		(120)		106		190		(307)		196
	2018	129		(229)		(21)		245		(139)		190
Total Company	2019	$	18,240	$	4,532	$	3,743	$	36,038	$	8,875	$	7,360
	2018	17,438		3,916		3,216		34,128		7,856		6,427


	Notional Amount						Fair Value Asset						Fair Value (Liability)
	December 31, 2019		June 30, 2019		December 31, 2019		June 30, 2019		December 31, 2019		June 30, 2019
DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS
Interest rate contracts	$	7,097	$	7,721	$	128	$	177	$	(5)	$	(1)
DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS
Foreign currency interest rate contracts	$	3,291	$	3,157	$	13	$	35	$	(25)	$	(24)
TOTAL DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS	$	10,388	$	10,878	$	141	$	212	$	(30)	$	(25)

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Foreign currency contracts	$	5,794	$	6,431	$	49	$	27	$	(17)	$	(20)

TOTAL DERIVATIVES AT FAIR VALUE	$	16,182	$	17,309	$	190	$	239	$	(47)	$	(45)


	Amount of Gain/(Loss) Recognized in OCI on Derivatives
	Three Months Ended December 31						Six Months Ended December 31
	2019		2018		2019		2018
DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS ^{(1) (2)}
Foreign exchange contracts	$	(82)	$	23	$	31	$	19


	Amount of Gain/(Loss) Recognized in Earnings
	Three Months Ended December 31						Six Months Ended December 31
	2019		2018		2019		2018
DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS
Interest rate contracts	$	(143)	$	42	$	(53)	$	18
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Foreign currency contracts	$	85	$	(5)	$	(12)	$	(7)


	Investment Securities		Pension and Other Retiree Benefits		Foreign Currency Translation		Total AOCI
Balance at June 30, 2019	$	11	$	(4,198)	$	(10,749)	$	(14,936)
OCI before reclassifications ⁽¹⁾	(4)		(6)		(148)		(158)
Amounts reclassified from AOCI into the Consolidated Statements of Earnings ⁽²⁾	(2)		148		—		146
Net current period OCI	(6)		142		(148)		(12)
Less: Other comprehensive income/(loss) attributable to non-controlling interests	—		—		(6)		(6)
Balance at December 31, 2019	$	5	$	(4,056)	$	(10,891)	$	(14,942)


	Reserve Balance		Charges Previously Reported (Three Months Ended September 30, 2019)		Charges for the Three Months Ended December 31, 2019		Six Months Ended December 31, 2019						Reserve Balance
	June 30, 2019								Cash Spent		Charges Against Assets		December 31, 2019
Separations	$	280	$	34	$	47	$	(80)	$	—	$	281
Asset-related costs	—		45		28		—		(73)		—
Other costs	188		14		30		(49)		—		183
Total	$	468	$	93	$	105	$	(129)	$	(73)	$	464


	December 31, 2019
Operating leases:
Other noncurrent assets	$	903

Accrued and other liabilities	251
Other noncurrent liabilities	676
Total operating lease liabilities	$	927

Weighted average remaining lease term:
Operating leases	6.5 years

Weighted average discount rate:
Operating leases	4.6		%


	Operating Leases
	December 31, 2019
1 year	$	251
2 years	200
3 years	163
4 years	139
5 years	105
Over 5 years	215
Total lease payments	1,073
Less: Interest	(146)
Present value of lease liabilities	$	927


	Operating Leases
	June 30, 2019
2020	$	263
2021	209
2022	165
2023	141
2024	121
After 2024	244
Total lease payments	$	1,143


Amounts in millions	November 30, 2018
Current assets	$	421
Property, plant and equipment	119
Intangible assets	2,134
Goodwill	2,083
Other non-current assets	209
Total assets acquired	$	4,966

Current liabilities	$	232
Deferred income taxes	763
Non-current liabilities	94
Total liabilities acquired	$	1,089

Noncontrolling interest ⁽¹⁾	$	169

Net assets acquired	$	3,708


Amounts in millions	Estimated Fair Value		Avg Remaining Useful Life
Intangible assets with determinable lives
Brands	$	701	14
Patents and technology	162		10
Customer relationships	325		20
Total	$	1,188	15

Intangible assets with indefinite lives
Brands	946
Total intangible assets	$	2,134


Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations


Reportable Segments	Product Categories (Sub-Categories)	Major Brands
Beauty	Hair Care (Conditioner, Shampoo, Styling Aids, Treatments)	Head & Shoulders, Herbal Essences, Pantene, Rejoice
		Skin and Personal Care (Antiperspirant and Deodorant, Personal Cleansing, Skin Care)	Olay, Old Spice, Safeguard, SK-II, Secret
Grooming	Grooming ⁽¹⁾ (Shave Care - Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other Shave Care; Appliances)	Braun, Gillette, Venus
Health Care	Oral Care (Toothbrushes, Toothpaste, Other Oral Care)	Crest, Oral-B
		Personal Health Care (Gastrointestinal, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Pain Relief, Other Personal Health Care)	Metamucil, Neurobion, Pepto Bismol, Vicks
Fabric & Home Care	Fabric Care (Fabric Enhancers, Laundry Additives, Laundry Detergents)	Ariel, Downy, Gain, Tide
		Home Care (Air Care, Dish Care, P&G Professional, Surface Care)	Cascade, Dawn, Fairy, Febreze, Mr. Clean, Swiffer
Baby, Feminine & Family Care	Baby Care (Baby Wipes, Taped Diapers and Pants)	Luvs, Pampers
		Feminine Care (Adult Incontinence, Feminine Care)	Always, Always Discreet, Tampax
		Family Care (Paper Towels, Tissues, Toilet Paper)	Bounty, Charmin, Puffs


	Three Months Ended December 31
Amounts in millions, except per share amounts	2019	2018	% Chg
Net sales	$18,240	$17,438	5%
Operating income	4,482	3,896	15%
Net earnings	3,743	3,216	16%
Net earnings attributable to Procter & Gamble	3,717	3,194	16%
Diluted net earnings per common share	1.41	1.22	16%
Core net earnings per common share	1.42	1.25	14%

	Three Months Ended December 31
COMPARISONS AS A PERCENTAGE OF NET SALES	2019	2018	Basis Pt Chg
Gross margin	51.4%	48.9%	250
Selling, general & administrative expense	26.8%	26.5%	30
Operating income	24.6%	22.3%	230
Earnings before income taxes	24.8%	22.5%	230
Net earnings	20.5%	18.4%	210
Net earnings attributable to Procter & Gamble	20.4%	18.3%	210


	Net Sales Change Drivers 2019 vs. 2018 (Three Months Ended December 31) ⁽¹⁾
	Volume with Acquisitions & Divestitures	Volume Excluding Acquisitions & Divestitures	Foreign Exchange	Price	Mix	Other ⁽²⁾	Net Sales Growth
Beauty	5%	5%	(1)%	2%	1%	—%	7%
Grooming	2%	2%	(2)%	2%	—%	—%	2%
Health Care	11%	5%	(1)%	1%	1%	2%	14%
Fabric & Home Care	3%	3%	(1)%	1%	1%	—%	4%
Baby, Feminine & Family Care	—%	—%	(1)%	—%	1%	1%	1%
Total Company	3%	3%	(1)%	1%	1%	1%	5%


	Three Months Ended December 31, 2019
	Net Sales		% Change Versus Year Ago		Earnings/(Loss) Before Income Taxes		% Change Versus Year Ago		Net Earnings		% Change Versus Year Ago
Beauty	$	3,598	7	%	$	1,072	11	%	$	858	11	%
Grooming	1,648		2	%	494		10	%	411		9	%
Health Care	2,530		14	%	732		9	%	571		10	%
Fabric & Home Care	5,787		4	%	1,278		13	%	975		13	%
Baby, Feminine & Family Care	4,582		1	%	1,076		16	%	822		16	%
Corporate	95		N/A		(120)		N/A		106		N/A
Total Company	$	18,240	5	%	$	4,532	16	%	$	3,743	16	%


Three Months Ended December 31, 2019	Net Sales Growth	Foreign Exchange Impact	Acquisition & Divestiture Impact/Other ⁽¹⁾	Organic Sales Growth
Beauty	7%	1%	—%	8%
Grooming	2%	2%	—%	4%
Health Care	14%	1%	(8)%	7%
Fabric & Home Care	4%	1%	—%	5%
Baby, Feminine & Family Care	1%	1%	(1)%	1%
Total Company	5%	1%	(1)%	5%


Six Months Ended December 31, 2019
Operating Cash Flow	Capital Spending	U.S. Tax Act Payments	Adjusted Free Cash Flow
$8,533	$(1,684)	$215	$7,064


THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES (Amounts in Millions Except Per Share Amounts) Reconciliation of Non-GAAP Measures
Three Months Ended December 31, 2019
	AS REPORTED (GAAP)		INCREMENTAL RESTRUCTURING		ROUNDING		NON-GAAP (CORE)
COST OF PRODUCTS SOLD	$	8,869	$	(42)	$	—	$	8,827
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE	4,889		25		—		4,914
OPERATING INCOME	4,482		17		—		4,499
INCOME TAX	789		5		—		794
NET EARNINGS ATTRIBUTABLE TO P&G	3,717		17		1		3,735
							Core EPS
DILUTED NET EARNINGS PER COMMON SHARE ⁽¹⁾	$	1.41	$	0.01	$	—	$	1.42


CHANGE VERSUS YEAR AGO
CORE NET EARNINGS ATTRIBUTABLE TO P&G	14	%
CORE EPS	14	%


Item 3.			Quantitative and Qualitative Disclosures About Market Risk


Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds