Proctor and Gamble 2002 Annual Report Download - page 37

35The Procter & Gamble Company and Subsidiaries
During 2002, the Company completed a buyout of the purchase price
contingency associated with the prior acquisition of Dr. John’s Spin-
brush. The total adjusted purchase price is approximately $475, with the
incremental payment resulting in additional goodwill.
In 2001, acquisitions totaled $246 resulting in additions to goodwill
and other intangibles of $208. In 2000, acquisitions consisted of The
Iams Company and Affiliates, Recovery Engineering, Inc. and a joint
venture ownership increase in China. These acquisitions totaled $2,967,
resulting in additions to goodwill and other intangibles of $2,508.
Spin-off
On May 31, 2002, the Jif peanut butter and Crisco shortening brands
were spun off to the Company’s shareholders, and subsequently merged
into The J.M. Smucker Company (Smucker). The Company’s shareholders
received one new common Smucker share for every 50 shares held in
the Company, totaling 26 million shares, or approximately $900 in
market value. This transaction was not included in the results of
operations, since a spin-off to the Company’s shareholders is recorded
at net book value, or $150, in a manner similar to dividends.
Note 4 Goodwill and Intangible Assets
The change in the net carrying amount of goodwill for the year ended
June 30, 2002 is allocated by reportable business segment as follows:
Goodwill increased in beauty care primarily due to the Clairol
acquisition. The increase in goodwill in health care related to the buyout
of the purchase price contingency for Dr. John’s Spinbrush.
Identifiable intangible assets as of June 30, 2002 and 2001 are
comprised of:
The amortization of intangible assets for the years ended June 30,
2002, 2001 and 2000 was $97, $80 and $77, respectively. Estimated
amortization expense over the next five years is as follows: 2003–$85,
2004–$85, 2005–$80, 2006–$80 and 2007–$50. Such estimates do
not reflect the impact of future foreign exchange rate changes.
The following table provides pro forma disclosure of net earnings and
earnings per common share for the years ended June 30, 2001 and
2000, as if goodwill and indefinite-lived intangible assets had not been
amortized.
Notes to Consolidated Financial Statements
Millions of dollars except per share amounts
Intangible Assets with
Determinable Lives
Trademarks
Patents and technology
Other
Trademarks with
Indefinite Lives
June 30, 2002 June 30, 2001
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
$27
78
186
291
169
460
$155
333
385
873
458
1,331
$457
494
385
1,336
1,678
3,014
$48
160
173
381
169
550
Fabric & Home Care, beginning of year
Translation & other
End of year
Baby, Feminine & Family Care, beginning of year
Translation & other
End of year
Beauty Care, beginning of year
Acquisitions
Translation & other
End of year
Health Care, beginning of year
Acquisitions
Translation & other
End of year
Food & Beverage, beginning of year
Translation & other
End of year
Goodwill, Net, beginning of year
Acquisitions
Translation & other
End of year
2002
$457
(6)
451
2,806
(163)
2,643
1,344
3,330
55
4,729
2,544
284
38
2,866
278
(1)
277
7,429
3,614
(77)
10,966
Years Ended June 30 Pro forma results
2001
Net earnings
Amortization, net of tax (1)
Adjusted net earnings
Basic net earnings per common share
Amortization, net of tax (1)
Adjusted basic net earnings per common share
Diluted net earnings per common share
Amortization, net of tax (1)
Adjusted diluted net earnings per common share
$3,542
212
3,754
$2.61
0.16
2.77
2.47
0.15
2.62
$2,922
218
3,140
$2.15
0.15
2.30
2.07
0.15
2.22
(1) Amortization of goodwill and indefinite-lived intangible assets.
2000