P&G Updates Earnings Projections Following Venezuelan Currency Devaluation

Thu Feb 14, 2013 4:10pm EST

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CINCINNATI--(Business Wire)--
The Procter & Gamble Company (NYSE:PG) provided an update of its fiscal year
2013 earnings per share outlook following the Venezuelan government`s announced
intention to devalue its currency (bolivar fuerte). The official exchange rate
is now bolivares fuertes 6.30 per United States dollar, effective with the
publication of the Official Gazette on February 13, 2013. It was also announced
that the currency market administered by the central bank known as SITME will be
eliminated. SITME transactions were previously valued at 5.30 bolivares fuertes
per U.S. dollar. 

P&G said it expects to incur one-time charges in the range of $200 million to
$275 million after-tax, or $0.07 to $0.09 per share, based on its preliminary
assessment of revaluing the local balance sheet at the new exchange rate. The
final impact will be dependent on confirmation of final balance sheet positions
at the date of the devaluation. The Company said it will recognize the one-time
charges as non-core items in its presentation of fiscal year 2013 results. 

In addition, the Company said there will be ongoing financial impacts related to
the translation of local financial statements at the new exchange rate and
inter-currency operational transactions, such as importation of finished
products and raw materials. P&G estimates these impacts will reduce fiscal year
2013 core earnings by approximately $0.03 per share. P&G estimates the
annualized impact on core earnings to be in the range of $0.06 to $0.07 per
share. These estimates assume that the 6.30 exchange rate will apply to all
future transactions and that the Company will have full access to currency at
this rate necessary to operate its Venezuelan business. These estimates also
assume current pricing regulations continue to be enforced. 

Fiscal Year 2013 EPS Guidance

P&G adjusted its core earnings per share guidance for the year to a range of
$3.94 to $4.04 from a prior range of $3.97 to $4.07 to reflect the $0.03 per
share operating impact on core earnings. 

On an all-in GAAP basis, P&G reduced its earnings per share guidance to a range
of $3.92 to $4.04 from its prior outlook of $4.04 to $4.14 per share, reflecting
the $0.03 operating impact and the $0.07 to $0.09 of one-time charges from
balance sheet revaluation. 

January - March 2013 Quarter EPS Guidance

The Company adjusted its March quarter core EPS guidance to a range of $0.90 to
$0.96 from a prior range of $0.91 to $0.97 to reflect a $0.01 per share
operating impact on core earnings. 

On an all-in basis, P&G reduced its March quarter earnings per share outlook to
a range of $0.80 to $0.88 from its prior guidance range of $0.90 to $0.96,
reflecting a $0.01 per share operating impact and the $0.07 to $0.09 of one-time
charges from balance sheet revaluation. 

Forward-Looking Statements

Certain statements in this release or presentation, other than purely historical
information, including estimates, projections, statements relating to our
business plans, objectives, and expected operating results, and the assumptions
upon which those statements are based, are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of
1934. These forward-looking statements generally are identified by the words
"believe," "project," "anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be," "will
continue", "will likely results," and similar expressions. Forward-looking
statements are based on current expectation and assumptions that are subject to
risks and uncertainties which may cause results to differ materially from the
forward-looking statements. We undertake no obligation to update or revise
publicly any forward-looking statements, whether because of new information,
future events or otherwise. 

Risks and uncertainties to which our forward-looking statements are subject
include: (1) the ability to achieve business plans, including growing existing
sales and volume profitably and maintaining and improving margins and market
share, despite high levels of competitive activity, an increasingly volatile
economic environment, lower than expected market growth rates, especially with
respect to the product categories and geographical markets (including developing
markets) in which the Company has chosen to focus, and/or increasing competition
from mid- and lower tier value products in both developed and developing
markets; (2) the ability to successfully manage ongoing acquisition, divestiture
and joint venture activities to achieve the cost and growth synergies in
accordance with the stated goals of these transactions without impacting the
delivery of base business objectives; (3) the ability to successfully manage
ongoing organizational changes and achieve productivity improvements designed to
support our growth strategies, while successfully identifying, developing and
retaining particularly key employees, especially in key growth markets where the
availability of skilled employees is limited; (4) the ability to manage and
maintain key customer relationships; (5) the ability to maintain key
manufacturing and supply sources (including sole supplier and plant
manufacturing sources); (6) the ability to successfully manage regulatory, tax
and legal requirements and matters (including product liability, patent,
intellectual property, price controls, import restrictions, environmental and
tax policy), and to resolve pending matters within current estimates; (7) the
ability to resolve the pending competition law inquiries in Europe within
current estimates; (8) the ability to successfully implement, achieve and
sustain cost improvement plans and efficiencies in manufacturing and overhead
areas, including the Company's outsourcing projects; (9) the ability to
successfully manage volatility in foreign exchange rates, as well as our debt
and currency exposure (especially in certain countries with currency exchange
controls, such as Venezuela, China, India and Argentina); (10) the ability to
maintain our current credit rating and to manage fluctuations in interest rate,
increases in pension and healthcare expense, and any significant credit or
liquidity issues; (11) the ability to manage continued global political and/or
economic uncertainty and disruptions, especially in the Company's significant
geographical markets, due to a wide variety of factors, including but not
limited to, terrorist and other hostile activities, natural disasters and/or
disruptions to credit markets, resulting from a global, regional or national
credit crisis; (12) the ability to successfully manage competitive factors,
including prices, promotional incentives and trade terms for products; (13) the
ability to obtain patents and respond to technological advances attained by
competitors and patents granted to competitors; (14) the ability to successfully
manage increases in the prices of commodities, raw materials and energy,
including the ability to offset these increases through pricing actions; (15)
the ability to develop effective sales, advertising and marketing programs; (16)
the ability to stay on the leading edge of innovation, maintain a positive
reputation on our brands and ensure trademark protection; and (17) the ability
to rely on and maintain key information technology systems and networks
(including Company and third-party systems and networks), the security over such
systems and networks, and the data contained therein. For additional information
concerning factors that could cause actual results to materially differ from
those projected herein, please refer to our most recent 10-K, 10-Q and 8-K
reports. 

About Procter & Gamble

P&G serves approximately 4.6 billion people around the world with its brands.
The Company has one of the strongest portfolios of trusted, quality, leadership
brands, including Pampers, Tide, Ariel, Always, Whisper, Pantene, Mach3, Bounty,
Dawn, Fairy, Gain, Charmin, Downy, Lenor, Iams, Crest, Oral-B, Duracell, Olay,
Head & Shoulders, Wella, Gillette, Braun, Fusion, Ace, Febreze, Ambi Pur, SK-II,
and Vicks. The P&G community includes operations in approximately 75 countries
worldwide. Please visit http://www.pg.com for the latest news and in-depth
information about P&G and its brands. 

The Procter & Gamble Company

Exhibit 1: Non-GAAP Measures

In accordance with the SEC`s Regulation G, the following provides definitions of
the non-GAAP measures used in the earnings release and the reconciliation to the
most closely related GAAP measure. 

Core EPS: This is a measure of the Company`s diluted net earnings per share from
continuing operations excluding charges in both years for incremental
restructuring charges due to increased focus on productivity and cost savings,
charges in the prior year related to the European legal matters, the current
year Venezuela balance sheet devaluation, the current year holding gain on the
buyout of our Iberian joint venture partner, and prior year impairment charges
for goodwill and indefinite lived intangible assets. We do not view these items
to be part of our sustainable results. We believe the Core EPS measure provides
an important perspective of underlying business trends and results and provides
a more comparable measure of year-on-year earnings per share growth. Core EPS is
also one of the measures used to evaluate senior management and is a factor in
determining their at-risk compensation. The table below provides a
reconciliation of diluted net earnings per share to Core EPS:

                                                             JFM 13 (est.)     JFM 12   
 Diluted Net Earnings Per Share                              $0.80 to $0.88    $0.82    
 Snacks results of operations - Discontinued Operations      -                 (0.01)   
 Diluted Net Earnings Per Share-Continuing Operations        $0.80 to $0.88    $0.81    
 Venezuela Balance Sheet Devaluation Impacts                 0.09 to 0.07      -        
 Impairment charges                                          -                 0.01     
 Incremental restructuring                                   0.01              0.12     
 Core EPS                                                    $0.90 to $0.96    $0.94    
 Core EPS Growth                                             -4% to +2%                 
                                                                                        
                                                                                        
                                                             FY 2013 (est.)    FY 2012  
 Diluted Net Earnings Per Share                              $3.92 to $4.04    $3.66    
 Gain from snacks divestiture                                -                 (0.48)   
 Snacks results of operations - Discontinued Operations      -                 (0.06)   
 Diluted Net EPS-Continuing Operations                       $3.92 to $4.04    $3.12    
 Venezuela Balance Sheet Devaluation Impacts                 0.09 to 0.07      -        
 Impairment charges                                          -                 $0.51    
 Incremental restructuring                                   $0.15             $0.20    
 Charges for European legal matters                          -                 $0.03    
 Gain on buyout of Iberian JV                                ($0.21)           -        
 Rounding/other impacts                                      ($0.01)           ($0.01)  
 Core EPS                                                    $3.94 to $4.04    $3.85    
 Core EPS Growth                                             2% to 5%                   
                                                                                        


Note - All reconciling items are presented net of tax. Tax effects are
calculated consistent with the nature of the underlying transaction.

P&G Media Contacts:
Paul Fox, 513-983-3465
Jennifer Chelune, 513-983-2570
or
P&G Investor Relations Contact:
John Chevalier, 513-983-9974 

Copyright Business Wire 2013

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