Proctor and Gamble 2000 Annual Report Download - page 21

FINANCIAL REVIEW (CONTINUED)
The Procter & Gamble Company and Subsidiaries
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Actonel (risedronate sodium tablets) 5 mg., the Company’s
first major prescription drug, was launched in the fourth
quarter. Actonel is a bisphosphonate for the prevention
and treatment of osteoporosis and is the only therapy
proven to significantly reduce spinal fractures in one year.
A milestone payment received upon FDA approval
of Actonel was essentially offset by launch costs in
the current year. The launch is off to a good start in the
United States, United Kingdom and Germany, with
launches planned shortly in four more countries.
Western Europe depressed sales, primarily due to the
weak euro and lower volume. The Actonel launch is
expected to impact Western Europe results more signif-
icantly next fiscal year.
In 1999, net sales were flat versus the prior year at
$2.88 billion on a 3% unit volume reduction. Net earn-
ings were $242 million, a 4% increase over 1998.
Earnings progress reflected a shift toward higher-margin
pharmaceutical sales and pricing, mitigated by invest-
ments in product launches.
FOOD AND BEVERAGE
Food and beverage net sales were flat versus last year at
$4.63 billion, including a 1% negative exchange impact.
Unit volume also was flat. Excluding the prior year divesti-
ture of Hawaiian Punch, unit volume increased 5% behind
strong growth in Western Europe and Northeast Asia,
partially due to the expansion of Pringles. Net earnings
increased to $364 million, up 11% versus last year, pri-
marily due to gross margin improvement.
Results in North America reflected significant competitive
activity, particularly in coffee and snacks. Initiative
launches helped drive volume, partially offsetting the
impact of the Hawaiian Punch divestiture. Despite product
cost savings, earnings were impacted by marketing costs
and other spending increases.
Unit volume in Western Europe achieved double-digit
growth with the successful expansion of Pringles. Juice
volume suffered due to a temporary public relations
setback with Sunny Delight in the United Kingdom that
has now been addressed. Recent launches in France and
Spain are expected to improve volume progress, along
with additional launches in Western Europe.
Northeast Asia posted double-digit progress on volume
and sales driven by renewed strength in the snacks busi-
ness, as well as strengthening of the Japanese yen.
In 1999, net sales increased 1% to $4.66 billion, on a 4%
volume increase. Net earnings were $328 million, a 12%
increase versus $294 million in 1998, which included
significant initiative related spending.
CORPORATE
The Corporate segment includes both operating and
non-operating elements, such as: financing and invest-
ing activities, goodwill amortization, employee benefit
costs, charges related to restructuring (including the
Organization 2005 program), segment eliminations and
other general corporate items.
Corporate sales reflected adjustments to reconcile
management reporting conventions to accounting prin-
ciples generally accepted in the United States of America.
Corporate results reflected increased charges from
Organization 2005 and goodwill amortization, partially
offset by lower corporate costs, including reduced
employee benefit costs and the proceeds of a patent
litigation settlement with Paragon Trade Brands, Inc.