Income Taxes
Fiscal year 2014 compared with fiscal year 2013
The effective tax rate on continuing operations decreased
170 basis points to 21.4% in 2014. The primary driver of
this rate decline was approximately 320 basis points from
the favorable geographic mix of earnings and approximately
60 basis points due to the non-deductibility of the prior year
impairment charges related to our Appliances business.
These impacts were partially offset by a 50 basis point
increase due to the Venezuela currency policy changes and
devaluation discussed below (which decreased the prior year
rate 20 basis points and increased the current year rate by 30
basis points), a 110 basis point increase due to the tax
impacts of acquisition and divestiture activities (the gains
from the purchase of the balance of the Baby Care and
Feminine Care joint venture in Iberia and the sale of our
Italy bleach business in the prior year), and a 30 basis point
increase is due to the net impact of favorable discrete
adjustments related to uncertain income tax positions. The
net benefit on the current year was $228 million, or 150
basis points, versus 180 basis points of net benefit in the
prior year.
Fiscal year 2013 compared with fiscal year 2012
The effective tax rate on continuing operations decreased
390 basis points to 23.1% in 2013. The primary drivers of
this rate decline were approximately 210 basis points due to
the non-deductibility of impairment charges related to our
Appliances and Salon Professional businesses, which were
higher in the base period versus the current year,
approximately 100 basis points due to the tax impacts from
acquisition and divestiture activity (primarily the nontaxable
gain on the purchase of the balance of the Baby Care
and Feminine Care joint venture in Iberia), approximately 20
basis points from the impact of the Venezuela currency
devaluation, and approximately 50 basis points due to the
net impact of favorable discrete adjustments related to
uncertain income tax positions. The 2013 net benefit was
$275 million, or 180 basis points, versus a net benefit of 130
basis points in 2012.
Net Earnings
Fiscal year 2014 compared with fiscal year 2013
Net earnings from continuing operations increased $406
million or 4% to $11.7 billion in 2014 due to the increase in
sales and a 40-basis point expansion in net earnings margin.
The increase in net earnings margin was primarily driven by
the decrease in SG&A as a percentage of net sales and the
lower tax rate, partially offset by the gross margin
contraction and the acquisition and divestiture-driven net
reduction in other non-operating income, net.
Net earnings from discontinued operations decreased $23
million in 2014 due to ongoing impacts of prior year product
recalls in Pet Care. Net earnings attributable to Procter &
Gamble increased $331 million, or 3% to $11.6 billion.
Income Taxes
Fiscal year 2014 compared with fiscal year 2013
The effective tax rate on continuing operations decreased
170 basis points to 21.4% in 2014. The primary driver of
this rate decline was approximately 320 basis points from
the favorable geographic mix of earnings and approximately
60 basis points due to the non-deductibility of the prior year
impairment charges related to our Appliances business.
These impacts were partially offset by a 50 basis point
increase due to the Venezuela currency policy changes and
devaluation discussed below (which decreased the prior year
rate 20 basis points and increased the current year rate by 30
basis points), a 110 basis point increase due to the tax
impacts of acquisition and divestiture activities (the gains
from the purchase of the balance of the Baby Care and
Feminine Care joint venture in Iberia and the sale of our
Italy bleach business in the prior year), and a 30 basis point
increase is due to the net impact of favorable discrete
adjustments related to uncertain income tax positions. The
net benefit on the current year was $228 million, or 150
basis points, versus 180 basis points of net benefit in the
prior year.
Fiscal year 2013 compared with fiscal year 2012
The effective tax rate on continuing operations decreased
390 basis points to 23.1% in 2013. The primary drivers of
this rate decline were approximately 210 basis points due to
the non-deductibility of impairment charges related to our
Appliances and Salon Professional businesses, which were
higher in the base period versus the current year,
approximately 100 basis points due to the tax impacts from
acquisition and divestiture activity (primarily the nontaxable
gain on the purchase of the balance of the Baby Care
and Feminine Care joint venture in Iberia), approximately 20
basis points from the impact of the Venezuela currency
devaluation, and approximately 50 basis points due to the
net impact of favorable discrete adjustments related to
uncertain income tax positions. The 2013 net benefit was
$275 million, or 180 basis points, versus a net benefit of 130
basis points in 2012.
Net Earnings
Fiscal year 2014 compared with fiscal year 2013
Net earnings from continuing operations increased $406
million or 4% to $11.7 billion in 2014 due to the increase in
sales and a 40-basis point expansion in net earnings margin.
The increase in net earnings margin was primarily driven by
the decrease in SG&A as a percentage of net sales and the
lower tax rate, partially offset by the gross margin
contraction and the acquisition and divestiture-driven net
reduction in other non-operating income, net.
Net earnings from discontinued operations decreased $23
million in 2014 due to ongoing impacts of prior year product
recalls in Pet Care. Net earnings attributable to Procter &
Gamble increased $331 million, or 3% to $11.6 billion.
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