Proctor and Gamble 2011 Annual Report Download - page 75

Notes to Consolidated Financial StatementsThe Procter & Gamble Company 73
Amounts in millions of dollars except per share amounts or as otherwise specified.
NOTE 12
DISCONTINUED OPERATIONS
In October 9, the Company completed the divestiture of our global
pharmaceuticals business to Warner Chilcott plc (Warner Chilcott) for
$2.8billion of cash, net of assumed and transferred liabilities. Under
the terms of the agreement, Warner Chilcott acquired our portfolio
of branded pharmaceutical products, our prescription drug product
pipeline and our manufacturing facilities in Puerto Rico and Germany. In
addition, the majority of the employees working on the pharmaceuticals
business were transferred to Warner Chilcott. The Company recorded
an after-tax gain on the transaction of $1,464, which is included in net
earnings from discontinued operations in the Consolidated Statement
of Earnings for the year ended June30,2010.
The pharmaceuticals business had historically been part of the
Company’s Health Care reportable segment. In accordance with the
applicable accounting guidance for the disposal of long-lived assets, the
results of the pharmaceuticals business are presented as discontinued
operations and, as such, have been excluded from both continuing
operations and segment results for all years presented.
In November 2008, the Company completed the divestiture of our
coffee business through the merger of our Folgers coffee subsidiary
into The J.M. Smucker Company (Smucker) in an all-stock Reverse
Morris Trust transaction. In connection with the merger, 38.7million
shares of common stock of the Company were tendered by share-
holders and exchanged for all shares of Folgers common stock,
resulting in an increase in treasury stock of $2,466. Pursuant to the
merger, a Smucker subsidiary merged with and into Folgers and Folgers
became a wholly owned subsidiary of Smucker. The Company recorded
an after-tax gain on the transaction of $2,011, which is included in net
earnings from discontinued operations in the Consolidated Statement
of Earnings for the year ended June30,2009.
The coffee business had historically been part of the Company’s Snacks,
Coffee and Pet Care reportable segment, as well as the coffee portion
of our away-from-home business, which was included in the Fabric
Care and Home Care reportable segment. In accordance with the
applicable accounting guidance for the disposal of long-lived assets,
the results of Folgers are presented as discontinued operations and,
as such, have been excluded from both continuing operations and
segment results for all years presented.
Following is selected financial information included in net earnings from discontinued operations for the pharmaceuticals and coffee businesses:
 010 2009
Years Ended June30 Pharma Coffee Total Pharma Coffee TotalPharmaCoffee Total
Net Sales $— $— $— $751 $— $751 $2,335 $668 $3,003
Earnings from discontinued operations ———306 —306 912 212 1,124
Income tax expense ———(101) — (101)(299)(80)(379)
Gain on sale of discontinued operation ———2,632 —2,632 —1,896 1,896
Income tax benefit/(expense) on sale ———(1,047) — (1,047) — 115 115
Net earnings from discontinued operations ———1,790 —1,790 613 2,143 2,756
The net gain on the sale of the pharmaceuticals business, in the table above, for the year ended June30,2010, also includes an after-tax gain on
the sale of the Actonel brand in Japan which occurred prior to the divestiture to Warner Chilcott.