Procter & Gamble to Book Up to $2.5 Billion in Charges for Restructuring, Gillette Impairment
December 05 2023 - 10:05AM
Dow Jones News
By Robb M. Stewart
Procter & Gamble flagged up to $2.5 billion in restructuring
charges for its international operations and an impairment hit for
assets it had picked up with the 2005 acquisition of Gillette.
The consumer-products company in a regulatory filing Tuesday
said it expects to record charges of between $1 billion and $1.5
billion after tax for the a limited portfolio restructuring, mainly
of certain operations in its enterprise markets arm, including
Argentina and Nigeria.
The charges include foreign currency translation losses it
expected to recognize on the liquidation of operations in the
affected markets. It said it estimates the large majority of the
charges will be considered noncash.
P&G forecast the charges will be recognized in the fiscal
years ending mid-2024 and mid-2025, with initial charges recognized
in final three months of this year, though the timing of the
completion of this restructuring program has yet to be
determined.
As well, the company said that as part of its restructuring
efforts it will book an about $1.3 billion impairment charge in the
three months to Dec. 31 on intangible assets bought with the deal
for Gillette.
The charge relates to a reduction in the estimated fair value of
the Gillette indefinite-lived intangible asset due to a higher
discount rate, weakening of several currencies relative to the U.S.
dollar and the impact of the restructuring program, P&G said.
The impairment adjusts the carrying value of the Gillette
intangible asset to fair value.
P&G said the underlying performance of the Gillette business
remains strong, but future adverse changes in the business or
macroeconomic environment could trigger a further impairment
charge.
Together, P&G said it expects total charges of about $2
billion to $2.5 billion after tax over the periods, which will be
reported as non-core charges.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
December 05, 2023 09:50 ET (14:50 GMT)
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