Proctor and Gamble 2004 Annual Report Download
Download and view the complete annual report
Please find the complete 2004 Proctor and Gamble annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.EarningYourTrust
AnnualReport 2004
Table of contents
-
Page 1
Earning฀Your฀Trust Annual฀Report 2004 -
Page 2
... Ariel,฀Pantene,฀Wella,฀Always,฀Crest,฀ Bounty,฀Charmin,฀Olay,฀Pringles,฀฀ Iams,฀Downy,฀Actonel,฀Folgers฀and... x��p�฀p Y E J N Op I N��฀E P 1฀ ฀ ฀ D N��฀E D 2004฀ $51,407฀ 9,827฀ 6,481฀ ฀ 2.32฀ 0.93฀ 4 9� �,... -
Page 3
...all฀its฀ï¬nancial฀goals฀in฀ï¬scal฀2004.฀ •฀Volume฀is฀up฀17%.฀Organic฀...฀size฀of฀P&G's฀total฀business฀in฀the฀U.K.฀or฀a฀ brand฀the฀size฀...of฀earnings. •฀Dividends฀are฀up฀13%,฀annualized. •฀Total฀Shareholder฀Return฀is฀24%.... -
Page 4
A.G.฀Laï¬,ey -
Page 5
...years.฀We฀have฀a฀31%฀share฀of฀global฀Fabric฀Care,฀฀ Organic฀Unit฀Volume฀Growth (%฀increase฀versus฀previous฀year) ��� 8� 4� annual฀sales฀and฀proï¬t฀growth฀of฀7%฀and฀16%,฀respectively,฀ over฀the฀past฀three฀years.฀ Ten฀more... -
Page 6
...,฀ we've฀delivered฀double-digit฀compounded฀annual฀growth฀ across฀the฀following฀Health฀Care฀...฀Actonel,฀which฀has฀grown฀ about฀90%฀a฀year฀over฀the฀three-year฀period.฀Actonel฀...฀of฀adding฀a฀brand฀ the฀size฀of฀Tide฀-฀every฀year. by... -
Page 7
...Wella,฀we฀are฀well฀positioned฀for฀strong฀growth. ฀ In฀Health฀Care,฀we฀have฀strong,฀growing฀franchises฀in฀Crest,฀ Iams฀and฀Prilosec฀OTC.฀We've฀only฀scratched฀the฀surface฀ with฀Actonel...Business฀Services,฀for... leading฀product฀innovation฀in... -
Page 8
...consumers฀when,฀where฀and฀how฀they฀choose.฀We฀must฀฀ be฀as฀innovative฀in฀marketing฀as฀we฀are฀in฀product฀design฀ and฀development. Global฀economic฀and฀political฀disruptions฀are฀also฀a฀ continuing฀risk.฀Our฀diversiï¬ed฀portfolio฀and... -
Page 9
...as฀ China,฀Russia฀and฀Mexico.฀In฀China,฀for฀example,฀we...฀reach฀China's฀largest฀cities.฀In฀the฀mid1990s,฀...ve฀doubled฀the฀size฀of฀P&G's฀China฀ business....฀Today,฀ we've฀expanded฀our฀product฀offerings฀to฀mid-tier฀consumers฀ ...฀Services฀... -
Page 10
...any฀industry฀have฀global฀business฀services฀ capability฀that฀rivals฀P&G's฀for...and฀ customers฀without฀duplicating฀product฀innovation,฀product฀ sourcing,฀brand฀advertising฀or...the฀Company฀with฀clearer฀reporting฀ structures,฀clearer฀accountability฀and... -
Page 11
...฀Research฀and฀Development฀is฀a฀good฀ example.฀Historically,฀systems฀for฀evaluating฀R&D฀were฀ strongly฀linked฀to฀technical฀product฀performance.฀There฀฀ was฀a฀heavy฀focus฀on฀patents฀and฀internally฀generated฀ innovation.฀There฀was฀less... -
Page 12
Touching Lives -
Page 13
...฀October฀1,฀2004฀after฀more฀than฀33฀years฀of฀service. ...service. Why฀are฀we฀realigning฀the฀business฀units?฀Our฀Beauty฀and฀ Health฀Care฀businesses฀have฀grown฀dramatically.฀As฀the฀฀ size฀of฀key฀businesses฀changed฀with฀acquisitions... -
Page 14
P&G฀added฀three฀billion-dollar฀brands฀this฀year:฀Actonel,฀Head฀&฀Shoulders฀and฀ the฀Wella฀family฀of฀Professional฀and฀Retail฀Hair฀Care฀products.฀P&G฀has฀16฀brands฀ with฀over฀one฀billion฀dollars฀in฀sales฀-฀up฀from฀10฀billion-... -
Page 15
13 P&G's฀Billion-Dollar฀Brands -
Page 16
-
Page 17
-
Page 18
Fabric฀฀ and฀Home -
Page 19
...Clean฀Magic฀Eraser฀and฀AutoDry฀ Carwash,฀two฀very฀successful฀new฀ product฀innovations,฀spurred฀this฀ well-known฀brand฀to฀volume฀growth฀ of฀nearly฀20%฀in฀ï¬scal฀year฀2004. Gain฀Fabric฀Enhancer The฀Gain฀brand฀delivered฀volume฀ growth... -
Page 20
Beauty -
Page 21
...฀of฀double-digit฀organic฀growth฀ and฀the฀acquisition฀of฀Wella.฀Wella฀joined฀P&G฀Beauty฀Care฀ in฀September฀2003฀and฀added฀approximately฀$3.3฀billion฀to฀ Beauty฀Care฀sales฀in฀ï¬scal฀2004.฀ Beauty฀Care's฀organic฀growth฀was฀led฀by... -
Page 22
Baby฀and฀ Family -
Page 23
...invest฀behind฀new฀ products฀with฀strong฀marketing฀...Ultra฀has฀maintained฀the฀brand's฀ advantages฀in฀softness,฀thickness,฀ absorbency฀and฀wet฀strength฀ against฀all฀competitors. Bounty In฀early฀2004,฀Bounty฀launched฀฀ a฀new฀array฀of฀prints... -
Page 24
Health -
Page 25
...combination฀of฀breakthrough฀innovation,฀strategic฀ acquisitions฀and฀alliances,฀and฀operating฀cost฀...product฀ innovations฀and฀improving฀proï¬t฀margins. All฀of฀the฀Health฀Care฀business฀segments฀delivered฀great฀ results฀in฀ï¬scal฀2004.฀Actonel... -
Page 26
Snacks฀and฀ Beverages -
Page 27
....฀ Pringles฀Prints Pringles฀Prints,฀our฀newest฀ technology-driven฀innovation฀in฀ snacks,฀allows฀us฀to฀print฀right฀฀ on฀the฀chip.฀One฀example,฀฀ Pringles฀Prints฀with฀Trivial฀Pursuit฀ Junior™฀questions,฀began฀shipping฀ in฀June฀2004... -
Page 28
MDO -
Page 29
...2004,฀P&G's฀global฀volume฀growth฀was฀17%,฀including฀the฀ impact฀of฀the฀Wella฀acquisition.฀Organic฀volume฀growth,฀ excluding฀acquisition...; •฀฀ improving฀the฀availability฀of฀our฀products฀on฀store฀shelves฀ with฀supply฀system฀innovations... -
Page 30
28 T��฀P������฀&฀G�����฀���p���฀���฀������������ Management's฀Responsibility฀for฀Financial฀Reporting ... -
Page 31
...฀ ฀ Segment฀Results฀ ฀ Financial฀Condition฀ ฀ Signiï¬cant฀Accounting฀Policies ฀ ฀ and฀Estimates฀ ฀ Other฀Information฀ Report฀of฀Independent฀Registered Public฀Accounting฀Firm฀ Audited฀Consolidated฀Financial฀Statements฀ ฀ Earnings฀ ฀ Balance... -
Page 32
30 T��฀P������฀&฀G�����฀���p���฀���฀������������ Management's฀Discussion฀and฀Analysis 2004฀Net฀Sales฀by฀Business฀Segment ��... 2004฀Net... -
Page 33
... ���฀�������฀��p����฀�p������฀�������.฀ Summary฀of฀2004฀Results... -
Page 34
32 T��฀P������฀&฀G�����฀���p���฀���฀������������ Management's฀Discussion฀and฀Analysis •฀ ... -
Page 35
...฀Progress (in฀billions฀of฀dollars) 5�.4 4�.� 4�.4 ���� ���� ���4 2004฀Net฀Sales฀by฀Geography... Eff������฀��x฀����฀ N��฀E�������฀ 2004฀ 51.2%฀ 32.1%฀... -
Page 36
34 T��฀P������฀&฀G�����฀���p���฀���฀������������ Management's฀Discussion฀and฀Analysis �������,฀G������฀���฀A�������������฀�xp... -
Page 37
Management's฀Discussion฀and฀Analysis T��฀P G p 35 D p w f฀�5 D p w 85 54 p p f฀ $�.�9 6฀p p Diluted฀Net฀Earnings (per฀common฀share T w z f p f x f x I p xp j f q q U.�.฀GAAP.฀ Fabric฀and฀Home฀Care w��฀�p฀9 ... -
Page 38
36 T��฀P������฀&฀G�����฀���p���฀���฀������������ Management's฀Discussion฀and฀Analysis ... -
Page 39
Management's฀Discussion฀and฀Analysis T��฀P������฀&฀G�����฀���p���฀���฀������������ 37 ... -
Page 40
...�p w,฀p ff p xp p w w f฀��p p w฀4�฀�f p p w��฀w w w฀p f฀f w w p f฀9 w฀p w 9 Free฀Cash฀Flow฀and฀Free฀Cash฀Flow฀Productivity (in฀billions฀and฀as฀%฀of฀net฀earnings) $8 6 4 4 9 w w P w P T Operating฀Activities... -
Page 41
Management's฀Discussion฀and฀Analysis T��฀P������฀&฀G�����฀���p���฀���฀������������ 39 ... -
Page 42
40฀฀ T��฀P������฀&฀G�����฀���p���฀���฀������������ Management's฀Discussion฀and฀Analysis ... -
Page 43
Management's฀Discussion฀and฀Analysis T��฀P������฀&฀G�����฀���p���฀���฀������������ 41 Revenue฀Recognition ... -
Page 44
42 T��฀P G p Management's฀Discussion฀and฀Analysis p OPE U f E�p Ow p฀P E�OP N���฀9 W p p p w f p f฀ A P p AP�)฀Op N�.฀�5,฀"A f I E�p p A p w x p q f p xp N 8 p pp f p��฀f p f p f��฀�p f p f... -
Page 45
Management's฀Discussion฀and฀Analysis T��฀P������฀&฀G�����฀���p���฀���฀������������ 43 I�������฀R���฀Exp... -
Page 46
44 T��฀P������฀&฀G�����฀���p���฀���฀������������ Report฀of฀Independent฀Registered Public฀Accounting฀Firm ... -
Page 47
... Basic฀Net฀Earnings฀Per฀Common฀Share1฀ Diluted฀Net฀Earnings฀Per฀Common฀Share1฀ Dividends฀Per฀Common฀Share1฀ 1฀ 2004฀ $51,407฀ 25,076฀ 16,504฀ 9,827฀ 629฀ 152฀ 9,350฀ 2,869฀ $6,481฀ $2.46฀ $2.32฀ $0.93฀ 4 4 8�฀ �,85... -
Page 48
...Intangible฀Assets฀ ฀ G���w T Net฀Goodwill฀and฀Other฀Intangible฀Assets Other฀Non-Current฀Assets฀ Total฀Assets฀ 2004฀ $5,469฀ 423฀ 4,062฀ 1,191฀ 340฀ 2,869฀ 4,400฀ 958฀ 1,803฀ 17,115฀ 5,9 8฀ �,�95฀ �9 54฀ �,64... -
Page 49
...54�.8 594.4)฀ A p p R f��฀E�OP A p R Total฀Shareholders'฀Equity฀ Total฀Liabilities฀and฀Shareholders'฀Equity฀ 1฀ J 2004฀ $3,617฀ 7,689฀ 2,554฀ 8,287฀ 22,147฀ 12,554฀ 2,261฀ 2,808฀ 39,770฀ 95฀ 5,5 8�9 58... -
Page 50
...O p N f x O f฀��x T p D P��f f฀��x T p 79,893)฀ E�p p 22,678฀ P��f 6,658฀ E�OP Balance฀June฀30,฀2004฀ ฀ 2,543,838฀ 1฀ 2฀ $�,59 5 9฀ ฀ �,6 8)฀ �4฀ 6฀ ฀ �,594 6 6�4 54 58 $�6 51,2฀ �44฀ 58 89... -
Page 51
...฀ Cash฀and฀Cash฀Equivalents,฀End฀of฀Year Supplemental฀Disclosure p f I I x��฀ N p��-�ff฀�f฀J�f Acquisition฀of฀Businesses f q x f Acquisitions฀ 2004฀ $5,912฀ ฀ 6,481฀ 1,733฀ 415฀ (159)฀ 56฀ 625฀ (88)฀ 299฀ 9,362... -
Page 52
... Cost฀of฀Products฀Sold ����฀�f฀p�������฀����฀p��������฀���p�����฀������฀���������฀���฀��pp... -
Page 53
Notes฀to฀Consolidated฀Financial฀Statements T��฀P������฀&฀G�����฀���p���฀���฀������������ 51 ... -
Page 54
...p p��j p f w f z p f p Note฀3฀Acquisitions฀and฀Spin-Off ฀ ฀฀ Net฀Earnings฀ ฀ A�฀��p P��฀f j Pro฀...and฀Reclassiï¬cations฀ N�฀��w p ff xp p f฀p f p Wella฀Acquisition฀ O�฀��p p q W AG฀(W T p w j f฀W... -
Page 55
... 5,864 9฀ ��5 66 4฀ �,6�9฀ �,�9�฀ 6 Net฀Sales฀ Net฀Earnings฀ Diluted฀Net฀Earnings ฀ per฀Common฀Share฀ 2004฀ $51,958฀ 6,402฀ $2.29฀ 46,�5�฀ 5 86฀ 4 4,�45 $�.54฀ ฀฀ T��฀W q 5.86 w f฀w w q w 5 w T 556... -
Page 56
...฀Statements Clairol฀Acquisition O�฀N 6 p p q f f���฀T M q p���฀f pp��x 5...Spin-off O�฀M J�f฀p w p��฀�ff p q T��฀J.M p T p w f 5 p 6 pp��x 9 T w f฀ �p p��-�ff p 5 O p q 84,฀$6 446 4 p 2004... -
Page 57
...฀and฀Other฀Current฀Liabilities฀ M p L W D A p xp O Other฀Non-Current฀Liabilities฀ P O p O ฀ ฀ 2004฀ $1,876฀ ฀ 1,106฀ 1,049฀ 3,658฀ 7,689฀ ฀ $1,798฀ 142฀ 868฀ 2,808฀ 8�� 8�4 �,9�6 5,5�� 8� 8�9 �,�9�฀ Selected... -
Page 58
56 T��฀P G p Notes฀to฀Consolidated฀Financial฀Statements Note฀7฀Risk฀Management฀Activities฀ A p���฀w p ff p xp x p T xp p xp f xp xp p w x w p p p xp p f A�฀N A f��฀D I A p T p f��฀�p p��p A p ... -
Page 59
...f f฀E�OP฀ Diluted฀net฀earnings฀ ฀ ฀ 2004฀ $6,481฀ (131)฀ 6,350฀ 131฀ (4)฀ 6,477฀ ฀ 2004฀ 5,�86฀ (��5)฀ 5,�6 5฀ (9)฀ 5 4,�5� (��4) 4,��8 ��4 4,�4�฀ Y J 59 9.�฀ 594.8 ���.6 ��.5 w 2,580... -
Page 60
...J $�6.4 4.84฀฀ �5 46.�4฀ 48 5�.98฀ ฀36,863 48,426 43,624 22,915฀฀฀ $24.07 31.06฀ 42.36฀ 49.49 2004฀ O f 259,598฀ G 40,866฀ J�f p��-�ff฀��j Ex 22,307 1,864)฀ Outstanding,฀end฀of฀year฀ 276,293฀ Ex A f 151,828฀ 165,399... -
Page 61
...p 208)฀ Fair฀value฀of฀plan฀assets฀ ฀ at฀end฀of฀year฀ 2,263฀ Funded฀status฀ (2,353)฀ 1฀ 2004฀ ���� ฀$�,9 4 8฀ 4�฀ (�9 5฀ (�55)฀ �,54�฀ ฀ $2,914฀ 89฀ 172฀ 31฀ (258)฀ (460)฀ 7฀ (8)฀ 41฀ 5฀ (133)฀ 2,400... -
Page 62
... O Ex V f฀P���฀A $(�,985)฀ $443฀ $(6��) 9 9 5�)฀ (344)฀ -฀ (259)฀ (160)฀ 4�5 4) 2004฀ P��j 2,809฀ A 2,396 f ฀ p 638฀ 945 9�9฀ 2004฀ $4,059฀ 3,320฀ 1,676฀ 9 �,49� �,�86 Classiï¬cation฀of฀net ฀ amount... -
Page 63
...A J P ���5 99 ฀-฀ -฀ 5.1%฀ 2010฀ 5 ฀ A O R D f f 2฀ D f f 3฀ R pp p f฀ M f f฀M f 4 8.8�฀f Eq 1฀ D R Total฀ 1฀ 2004฀ 64%฀ 32%฀ 4%฀ 100%฀ 6 5 2004฀ 99%฀ 1%฀ -%฀ 100%฀ 99 Eq f p p f E�OP... -
Page 64
62 T��฀P������฀&฀G�����฀���p���฀���฀������������ Notes฀to฀Consolidated฀Financial฀Statements ... -
Page 65
... f����w���: ฀ Y J A U Total฀Series฀A฀ ฀ A U Total฀Series฀B฀ 2004฀ 62,511฀ 28,296฀ 90,807฀ ฀ 21,399฀ 48,528฀ 69...Current฀Tax฀Expense฀ U I U L Deferred฀Tax฀Expense฀ U I 2004฀ ฀ $1,508฀ 830฀ 116฀ 2,454฀ ฀ 348฀ 67฀... -
Page 66
... 4 p xp w W x p f p f w w ff p ฀ ฀ ฀ Deferred฀Tax฀Assets฀ ฀ U z L f��w A p O p O V w Deferred฀Tax฀Liabilities x G���w O 2004฀ ฀ $381฀ 365฀ 226฀ 95฀ 1,169฀ (342)฀ 1,894฀ 8 8� 9� 8�� (�58) �,5�5 (1,350... -
Page 67
Notes฀to฀Consolidated฀Financial฀Statements T��฀P G p 65 Note฀12฀Segment฀Information ฀ T p z f���฀p G U T w p p p f ff f p f����w f f p��f f f p p w�p w p p p ff j I�฀A 4 p j Eff J 4 p p w w w T p f p N... -
Page 68
...p Q E���� Net฀Sales Operating฀Income Net฀Earnings Diluted฀Net฀Earnings฀Per฀Common฀Share1 1฀ 2003-2004 2003-2004 2003-2004 2003-2004 $12,195฀฀ ฀$13,221฀฀ ฀$13,029฀฀ ฀$12,962฀฀ ฀$51,407 96 5฀ ��,656฀ ��,9��฀ 4 2,643... -
Page 69
...Research฀and฀ ฀ Development฀Expense฀ Advertising฀Expense฀ Total฀Assets฀ Capital฀Expenditures฀ Long-Term฀Debt฀ Shareholders'฀Equity฀ 1฀ 2฀ 2004฀ $51,407฀ 9,827฀ 6,481฀ 12.6%฀ 2003฀฀ ฀$4 85 5,�86 2002฀฀ 2001฀฀ ฀$4�,��8 9,�44... -
Page 70
...Enterprises฀LLC฀(venture฀ web฀services฀ï¬rm).฀Director฀ capital).฀Director฀...฀Inc.฀and฀eBay฀Inc.฀฀ National฀City฀Corporation฀ Age฀52.฀Member฀of฀the... Graduate฀School฀of฀ Management,฀Northwestern฀ University฀and฀Chair฀of฀the฀ Council฀for... -
Page 71
...L.L.P.,฀Cleveland,฀Ohio.฀...goods฀and฀services).฀ Director...Mexico฀ and฀Director฀of฀the฀Center฀ for฀the฀Study฀of฀ Globalization฀and฀Professor฀ in฀the฀ï¬eld฀of฀International฀ Economics฀and฀Politics฀at฀ Yale฀University...Global฀Product฀Supply฀... -
Page 72
...฀information,฀transaction฀ forms,฀information฀about฀the฀2004฀ stock฀split,฀Company฀reports฀and฀ webcasts,฀as฀well฀as฀product฀ information,฀newsletters฀and฀samples. Corporate฀Sustainability฀Report Sustainable฀development฀is฀a฀simple฀ idea... -
Page 73
P&G฀at฀a฀Glance N 1 G U��� P L L f f f f��฀�p f K Fabric฀and฀Home฀Care Beauty฀Care f p���p p p p p Baby฀and฀Family฀Care p w�p P�p w f T A D�w��,฀L D�w J��,฀G A��฀L w�ff��,฀D ... -
Page 74
P&G฀ ฀ 2004฀Annual฀Report ©฀2004฀Procter฀&฀Gamble 0038-7122