Proctor and Gamble 2006 Annual Report Download - page 50

Millions of dollars except per share amounts or otherwise specified.
Notes to Consolidated Financial Statements
The Procter &Gamble Company and Subsidiaries
48
The following tables summarize the changes within Shareholders’
Equity as of June 30, 2003, 2004, 2005 and 2006 from the change in
our method of accounting for treasury stock and from the adoption
of SFAS 123(R):
Effect of
As Originally Treasury Effect of
As of June 30, 2003 Reported Stock Change SFAS 123(R) As Adjusted
Common Stock $ 2,594 $ 382 $ — $ 2,976
Preferred Stock 1,580 — — 1,580
Additional Paid-In
Capital 1,634 (2,475) 2,730 1,889
Reserve for ESOP
Debt Retirement (1,308) — — (1,308)
Accumulated Other
Comprehensive
Income (2,006) — — (2,006)
Treasury Stock — (9,772) — (9,772)
Retained Earnings 13,692 11,865 (1,891) 23,666
Total Shareholders’
Equity 16,186 — 839 17,025
Effect of
As Originally Treasury Effect of
As of June 30, 2004 Reported Stock Change SFAS 123(R) As Adjusted
Common Stock $ 2,544 $ 432 $ — $ 2,976
Preferred Stock 1,526 — — 1,526
Additional Paid-In
Capital 2,425 (3,098) 3,127 2,454
Reserve for ESOP
Debt Retirement (1,283) — — (1,283)
Accumulated Other
Comprehensive
Income (1,545) — — (1,545)
Treasury Stock — (12,925) — (12,925)
Retained Earnings 13,611 15,591 (2,215) 26,987
Total Shareholders’
Equity 17,278 — 912 18,190
Effect of
As Originally Treasury Effect of
As of June 30, 2005 Reported Stock Change SFAS 123(R) As Adjusted
Common Stock $ 2,473 $ 504 $ — $ 2,977
Preferred Stock 1,483 — — 1,483
Additional Paid-In
Capital 3,142 (3,659) 3,547 3,030
Reserve for ESOP
Debt Retirement (1,259) — — (1,259)
Accumulated Other
Comprehensive
Income (1,566) — — (1,566)
Treasury Stock — (17,194) — (17,194)
Retained Earnings 13,204 20,349 (2,549) 31,004
Total Shareholders’
Equity 17,477 — 998 18,475
As Computed Effect of
Under Treasury
As of June 30, 2006 Old Method Stock Change As Reported
Common Stock $ 3,179 $ 797 $ 3,976
Preferred Stock 1,451 — 1,451
Additional Paid-In Capital 60,970 (3,114) 57,856
Reserve for ESOP Debt Retirement (1,288) — (1,288)
Accumulated Other
Comprehensive Income (518) — (518)
Treasury Stock — (34,235) (34,235)
Retained Earnings (886) 36,552 35,666
Total Shareholders’ Equity 62,908 — 62,908
CHANGE IN SEGMENT REPORTING
In April 2006, we announced a number of changes to certain key
leadership positions, which resulted in changes to our Global Business
Unit (GBU) structure and segment reporting. These changes dissolved
our P&G Family Health GBU by realigning the component businesses
within our remaining GBUs. Specifically, pet health and nutrition,
which used to be part of our Health Care reportable segment, became
part of our Snacks and Coffee reportable segment. The balance of our
Health Care reportable segment was combined with the P&GBeauty
GBU, but will continue to be reported as a separate reportable
segment. In addition, our commercial products organization, which
primarily sells cleaning products directly to commercial end users, was
moved from Snacks and Coffee to our Fabric Care and Home Care
reportable segment. Finally, the adult incontinence business was aligned
with our feminine care business and as a consequence moved from
Baby Care and Family Care to P&G Beauty. The balance of the Baby
Care and Family Care reportable segment was moved from the P&G
Family Health GBU to the P&G Household Care GBU but will continue
to be reported as a separate reportable segment.
In conjunction with these changes, the P&G Beauty GBU was renamed
“Beauty and Health,” the Snacks and Coffee reportable segment was
renamed “Pet Health, Snacks and Coffee,” the P&GHouseholdCare
GBU was renamed “Household Care” and the P&G Family Health GBU
was eliminated. We now operate with three GBUs and seven reportable
segments as summarized in the following table:
GBU Reportable Segment
BEAUTY AND HEALTH Beauty
Health Care
HOUSEHOLD CARE Fabric Care and Home Care
Baby Care and Family Care
Pet Health, Snacks and Coffee
GILLETTE GBU Blades and Razors
Duracell and Braun
The accompanying financial statements, including historical results,
reflect the new management and organization structure.
In July 2006, the FASB issued FIN 48, “Accounting for Uncertainty
in Income Taxes.” FIN 48 addresses the accounting and disclosure
of uncertain tax positions. We will adopt FIN 48 on July 1, 2007.