Business Context and Reporting Period
This Form 10-K covers The Procter & Gamble Company for the fiscal year ended June 30, 2000. The Company is a global manufacturer and marketer of consumer products operating in five segments: fabric and home care, paper, beauty care, health care, and food and beverage. As of July 31, 2000, there were 1,306,135,586 shares of Common Stock outstanding, with an aggregate market value of voting stock held by non-affiliates of $74 billion. The Company employs approximately 110,000 people and operates manufacturing facilities in 23 U.S. states and 45 other countries.
Key Financial Metrics
Specific consolidated revenue, profit, cash flow, margin, and debt figures are not explicitly stated in the provided text, as the filing incorporates the Consolidated Financial Statements by reference. However, the following geographic and asset data is provided (in millions):
| Region | Net Sales 2000 | Net Sales 1999 | Net Sales 1998 | Assets 2000 | Assets 1999 | Assets 1998 |
|---|---|---|---|---|---|---|
| United States | $20,038 | $18,314 | $17,848 | $17,227 | $15,142 | $15,159 |
| International | $19,913 | $19,811 | $19,306 | $16,967 | $16,971 | $15,807 |
Sales by Geography (Fiscal 2000): North America (54%), Europe/Middle East/Africa (28%), Asia (11%), and Latin America (7%).
Material Changes
- Geographic Shift: The North American sales percentage increased slightly versus prior years, primarily due to the acquisition of Iams.
- Category Mix: Laundry and diaper categories constituted approximately 20% and 12% of consolidated sales, respectively. These categories declined slightly as a percentage of consolidated sales versus the prior year but remained comparable to the year before that.
- Asset Growth: Both U.S. and International assets increased from 1999 to 2000, with U.S. assets rising from $15,142 million to $17,227 million.
Outlook, Risks, and Contingencies
Forward-Looking Statements: Management's outlook relies on the successful implementation of "Organization 2005" (cost and tax savings), volume growth, pricing plans, and growth in developing markets (China, Mexico, Southern Cone, Central/Eastern Europe). Risks include competitive activity, currency movements, and regulatory matters.
Legal Proceedings:
- Environmental: The Company is involved in Superfund clean-up efforts. The accrued amount for probable future costs as of June 30, 2000, was $7 million.
- Securities Litigation: The Company is subject to a lawsuit alleging damages under U.S. Securities laws regarding earnings releases from March 7, 2000, and June 8, 2000. Management believes the ultimate liability will not materially affect financial condition, though the effect is not currently subject to reasonable estimation.
Investor Verification Checklist
- Verify the full Consolidated Statements of Earnings and Cash Flows in the Annual Report to Shareholders (pages 24-39) to obtain specific revenue, net income, and cash flow figures not detailed in this text.
- Review the "Financial Review" section (pages 13-23 of the Annual Report) for detailed margin analysis and segment profitability.
- Confirm the status of the securities class action lawsuit regarding the March and June 2000 earnings releases.
- Assess the progress and cost savings realization of the "Organization 2005" restructuring initiative.
- Monitor the impact of the Iams acquisition on the North American sales mix and overall profitability.