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This article was originally published in The Tan Sheet

Executive Summary

PROCTER & GAMBLE FOURTH QUARTER PRE-TAX OPERATING EARNINGS UP 9.2% to $ 452 mil., before taxes and excluding previously announced restructuring reserves and accounting changes. The gain in pre-tax operating earnings for the period ended June 30 was consistent with a 9% increase in pre-tax operating earnings for the first nine months. For the full fiscal year 1993, pre-tax operating earnings reached $ 3.13 bil., ahead by 9.3%. During the fourth quarter, P&G established a $ 1.5 bil. after- tax reserve for wide-scale plant consolidations and other major organizational restructuring, and retroactively adopted two accounting standards related to retiree medical benefits and deferred taxes ("The Tan Sheet" July 19, p. 7). The effect of the accounting changes, relatively minimal in the fourth quarter, reduced net earnings by another $ 1 bil. for the fiscal year. Procter & Gamble recorded a $ 1.22 bil. net loss in the fourth quarter when the restructuring and accounting charges are included. The quarterly loss was the primary contributor to a fiscal 1993 net loss for the company, the first year-end loss in P&G's history. Fourth quarter net earnings excluding the charges were $ 341 mil., up a marginal .6% over $ 339 mil. for the fourth quarter of the previous year, when a $ 61 mil. gain on the sale of the company's Italian coffee business is included. Excluding the gain on the coffee business in fiscal 1992 (and excluding the fourth quarter restructuring charges), net earnings for the most recent quarter were 23% ahead of last year. P&G said that about half of the 23% increase was due to a lower tax rate. The tax rate for the 1993 fourth quarter was 28.4%, versus 31.8% for the prior-year period. Fiscal 1993 net earnings excluding the restructuring charges and accounting changes were up 11% to $ 2.08 bil. When the charges are included and added to a $ 200 mil. charge from earlier in the year related to the divestiture of the company's 100% juice business, P&G shows an after-tax loss of $ 656 mil. for the year. The firm had net earnings of $ 1.87 bil. in fiscal 1992. P&G's net sales for the fourth quarter rose 2.8% to $ 7.37 bil. and advanced 3.6% to $ 30.43 bil. for the full year. Commenting on results, P&G Chairman and CEO Edwin Artzt said: "This was both our best year and one of our toughest. We're pleased that our business is moving forward strongly in the face of the continuing sluggish economic climate in much of the world, and that our efforts to improve the value of our brands are paying off." Chart omitted.

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