Proctor and Gamble 2008 Annual Report Download - page 65

NotestoConsolidatedFinancialStatements TheProcter&GambleCompany 63
Amountsinmillionsofdollarsexceptpershareamountsorasotherwisespecied.



InMarch2008,theFASBissuedSFASNo.161,“Disclosuresabout
DerivativeInstrumentsandHedgingActivities—AnAmendmentof
FASBStatementNo.133”(SFAS161).SFAS161impactsdisclosures
onlyandwillprovideadditionalqualitativeandquantitativeinformation
ontheuseofderivativesandtheirimpactonanentity’snancial
position,resultsofoperationsandcashows.SFAS161willbeeffective
fortheCompanybeginningJanuary1,2009.
NOT E 2


OnOctober1,2005,wecompletedouracquisitionofTheGillette
Company.Pursuanttotheacquisitionagreement,whichprovidedfor
theexchangeof0.975sharesofTheProcter&GambleCompany
commonstock,onatax-freebasis,foreachshareofTheGillette
Company,weissued962millionsharesofTheProcter&Gamble
Companycommonstock.Thevalueoftheseshareswasdetermined
usingtheaverageCompanystockpricesbeginningtwodaysbefore
andendingtwodaysafterJanuary28,2005,thedatetheacquisition
wasannounced.Wealsoissued79millionstockoptionsinexchange
forGillette’soutstandingstockoptions.Underthepurchasemethod
ofaccounting,thetotalconsiderationwasapproximately$53.4billion
includingcommonstock,thefairvalueofvestedstockoptionsand
acquisitioncosts.ThisacquisitionultimatelyresultedinanewGrooming
reportablesegment.TheGilletteoralcare,batteriesandpersonalcare
businessesweresubsumedwithintheHealthCare,FabricCareand
HomeCare,andBeautyreportablesegments,respectively.Theoperating
resultsoftheGillettebusinessesarereportedinournancialstatements
beginningOctober1,2005.
TheGilletteCompanywasamarketleaderinseveralglobalproduct
categoriesincludingbladesandrazors,oralcareandbatteries.Total
salesforGilletteduringitsmostrecentpre-acquisitionyearended
December31,2004,were$10.5billion.
Inordertoobtainregulatoryapprovalofthetransaction,wewere
requiredtodivestcertainoverlappingbusinesses.Wecompletedthe
divestitureoftheSpinbrushtoothbrushbusiness,Rembrandt(aGillette
oralcareproductline),RightGuardandotherGillettedeodorantbrands
duringthescalyearendedJune30,2006.
Inconnectionwiththisacquisition,wealsoannouncedashare
buybackplan,whichwecompletedinJuly2006,underwhichwe
acquired$20.1billionofCompanycommonshareseitherthrough
theopenmarketorfromprivatetransactions.
InconjunctionwiththeacquisitionofTheGilletteCompany,we
recognizedanassumedliabilityforGilletteexitcostsof$1.2billion,
including$854inseparationcostsrelatedtoapproximately5,500
people,$55inemployeerelocationcostsand$320inotherexit
costs.Thesecostsareprimarilyrelatedtotheeliminationofselling,
generalandadministrativeoverlapbetweenthetwocompaniesin
areaslikeGlobalBusinessServices,corporatestaffandgo-to-market
support,aswellasredundantmanufacturingcapacity.Theseactivities
aresubstantiallycompleteasofJune30,2008.Totalintegrationplan
chargesagainsttheassumedliabilitywere$286,$438and$204for
theyearsendedJune2008,2007and2006,respectively.Atotalof
$121oftheliabilitywasreversed,whichresultedinareductionto
goodwillduringtheyearendedJune30,2008,relatedtounderspend-
ingonanumberofprojectsthatwereconcludedduringtheperiod.
Otherminorbusinesspurchasesandintangibleassetacquisitions
totaled$418,$540and$395in2008,2007and2006,respectively.