The financial statements of P&G are presented in Appendix B. The company's complete annual report, including the notes to the financial statements, is available online. Click here to view Appendix B Refer to P&G's financial statements and accompanying notes to answer the following questions. Part 1 Under P&G's stock-based compensation plan, stock options are granted annually to key managers and directors. (1) How many options were granted during 2017 under the plan? Options granted during 2017 (2) How many options were exercisable at June 30, 2017? Options exerciseable at June 30, 2017 (3) How many options were exercised in 2017, and what was the average price of those exercised? (Round average price to 2 decimal places, e.g. 15.25.) Options exercised in 2017 Average price $ (4) What is the total stock-based compensation expense for stock options and the total compensation expense for restricted stock, restricted stock units (RSUs), and performance stock units (PSUs) for 2017, 2016, and 2015? 2017 2016 2015 Total stock-based compensation expense $ $ $ Total compensation expense $ $ $ (5) To what accounts are the proceeds from these option exercises credited? Option exercises credited (6) What was the number of outstanding options at June 30, 2017, and at what average exercise price? (Round average price to 2 decimal places, e.g. 15.25.) Number of outstanding options Average exercise price $ Your answer is partially correct. What number of diluted weighted-average common shares outstanding was used by P&G in computing earnings per share for 2017, 2016, and 2015? (Round answers to millions upto 1 decimal places, e.g. 125.5.) (In millions) 2017 2016 2015 Weighted-average common shares 1 What was P&Gs diluted earnings per share in 2017, 2016, and 2015? (Round answers to 2 decimal places, e.g. 15.25.) 2017 2016 2015 Diluted earnings per share $ 5.59 ta 3.69 ta 2.44 2017 2016 $ 65,058 32,535 18,568 S 65,299 32,909 18,949 13:441 579 182 13.955 465 171 (404) 13,257 3,063 10,194 2015 $ 70,749 37,056 20,616 2,028 11,049 626 149 440 11,012 2,725 8.287 (1,143) 7.144 325 13.369 Consolidated Statements of Earnings Amounts in millions excepl per share amounts; Years ended.June 30 NET SALES Cost of products sold Selling, general and administrative expense Venezuela deconsolidation charge OPERATING INCOME Interest expense Interest income Other non-perating income/expense), nel EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Income taxes on continuing operations NET EARNINGS FROM CONTINUING OPERATIONS NET EARNINGS/(LOSS) FROM DISCONTINUED OPERATIONS NET EARNINGS Less: Net earnings attributable to noncontrolling interests NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE BASIC NET EARNINGS PER COMMON SHARE:(1) Earnings from continuing operations Earnings/(loss) from discontinued operations BASIC NET EARNINGS PER COMMON SHARE DILUTED NET EARNINGS PER COMMON SHARE:01) Earnings from continuing operations Earnings/(loss) from discontinued operations DILUTED NET EARNINGS PER COMMON SHARE DIVIDENDS PER COMMON SILARE TE 5.217 15.411 85 10,027 577 10,604 96 S 10.508 108 $ 15:326 $ 7.036 $ S S 3.79 2.01 5.80 3-59 0.21 2.92 (0.42) 2.50 3.80 $ $ $ 3.69 1.90 2.84 (0.40) 3-49 0.20 3.69 2.66 $ $ $ $ 2.44 5:59 2.70 S $ S 2.59 (1) Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble. 2017 2016 2015 $ 15,411 $ 10,604 $ 7,144 (1,679) Consolidated Statements of Comprehensive Income Amounts in millions; Years ended June 30 NET EARNINGS OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX Financial statement translation Unrealized gains/(losses) on hedges (net of $(186), $5 and $739 tax, respectively) Unrealized gains/(losses) on investment securities (net of $(6), $7 and $o tax, respectively) Unrealized gains/(losses) on defined benefit retirement plans (net of $551, $(621) and $328 tax, respectively) TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX TOTAL COMPREHENSIVE INCOME Less: Total comprehensive income attributable to noncontrolling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE 239 (306) (59) 1 28 (7,220) 1,234 24 844 (5,118) 1,401 (1,477) (3,127) 1,275 16,686 85 $ 16,601 7,477 96 $ 7,381 2,026 108 $ 1,918 2017 2016 S $ 5.569 9,568 4.594 7.102 6,246 4.373 Consolidated Balance Sheets Amounts in millions; As of June 30 ANNCEN CURRENT ASSETS Cash and cash equivalents Available-for-sale investment securities Accounts receivable INVENTORIES Malerials and supplies Work in process Finished goods Total inventoreis Deferred income taxes Prepaid expenses and other current assets Current assets held for sale TOTAL CURRENT ASSETS PROPERTY, PLANT AND EQUIPMENT, NET GOODWILL TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET OTHER NONCURRENT ASSETS TOTAL ASSETS 1.308 529 2.787 4,624 2,139 1,188 563 2.965 4.716 1,507 2,653 7,185 33.782 19.385 44.350 24:527 5,092 $ 127,136 26.494 19,893 44,699 24.187 5,133 $ 120,406 S 9,325 9,632 7,024 13,554 30,210 18,038 8,126 8,254 64,628 7,449 2,343 11,653 30.770 18.945 9,113 10.325 69,153 Liabilities and Shareholders' Equity CURRENT LIABILITIES Accounts payable Accrued and other liabilities Current liabilities held for sale Debl due within one year TOTAL CURRENT LIABILITIES LONG-TERM DEBT DEFERRED INCOME TAXES OTHER NONCURRENT LIABILITIES TOTAL LLABILITIES SHAREHOLDERS' EQUITY Convertible Class A preferred stock, stated value Si per share 600 shares authorized) Non-Voting Class B preferred stock, stated value $1 per share (200 shares authorized) Common stock, stated value $1 per share (10,000 shares authorized; shares issued: 2017- 4,009.2, 2016 - 4,009.2) Additional paid-in capital Reserve for ESOP debl retirement Accumulated other comprehensive income/loss) Treasury stock, at cost (sharcs held: 2017 - 1,455.9, 2016 - 1,341.2) Retained earnings Noncontrolling interest TOTAL SHAREHOLDERS' EQUITY TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY See accompanying Notes to Consolidated Financial Statements. 1.006 1,038 4,009 63,641 (1,249) (14,632) (93,715) 96,124 594 55,778 8 120.406 4,009 63,714 (1,290) (15.907) (82,176) 87.953 642 57,983 $ 127,136 Consolidated Statements of Shareholders' Equity Accumulated Other Total Common Additional Reserve for Comprehensive Non Share Dollars in millions; Shares Common Preferred Paid-In ESOP Debt Income/ Treasury Retained controlling holders' Shares in thousands Outstanding Stock Stock Capital Retirement (Loss) Stock Earnings Interest Equity BALANCE JUNE 30, 2014 2,710,806 $4,009 $1,111 $63,911 ($1,340) ($7,662) ($75,805) $84.990 $762 $69,976 Net carnings 7,036 108 7,144 Olher comprehensive loss (5,118) (5,118) Dividends to shareholders: Common (7,028) (7,028) Preferred, nel of lax benelits (259) (259) Treasury purchases (54,670) (4,604) (4,604) Employee plan issuances 54,100 156 3,153 3 309 Preferred stock conversions 4.335 (34) 4 30 ESOP debt impacts 20 68 88 Noncontrolling interest, net (219) (239) (458) BALANCE JUNE 30, 2015 2,714,571 $4,009 $1,077 $63,852 ($1,320) ($12,780) (877,226) $84,807 $631 $63,050 Net earnings 10,508 96 10,604 Other comprehensive loss (3,127) (3,127) Dividends to shareholders: Common (7,181) (7,181) Preferred, nct of tax benefits (255) (255) Treasury purchases (1) (103,449) (8,217) (8,217) Employee plan issuances 52,089 (144) 3,234 3,090 Preferred stock conversions 4,863 (39) 6 33 ESOP debl impacts 30 74 104 Noncontrolling interest, net (85) (85) BALANCE JUNE 30, 2016 2,668,074 $4,009 $1,038 $63,714 ($1,290) ($15.907) ($82,176) $87,953 $642 $57.983 74 15,326 85 15,411 1,275 1,275 (6,989) (247) Net earnings Other comprehensive loss Dividends to shareholders: Common Preferred, net of tax benefits Treasury purchases(2) Employee plan issuances Preferred stock conversions ESOP debt impacts Noncontrolling interest, net BALANCE JUNE 30, 2017 (6,989) (247) (14,625) 2,981 (164,866) 45,848 4,241 (77) (14,625) 3,058 28 (32) 4 41 81 122 (133) (133) $594 $55,778 2,553,297 $4,009 $1,006 $63,641 ($1,249) ($14,632) ($93,715) $96,124 (1) Includes $4,213 of treasury shares acquired in the divestiture of the Batteries business (see Note 13). (2) Includes $9,421 of treasury shares received as part of the share exchange in the Beauty Brands transaction (see Note 13). See accompanying Notes to Consolidated Financial Statements. Consolidated Statements of Cash Flows 2017 2016 2015 $ 6,836 $ 8,548 S 7,102 10,604 3,078 7,144 3,134 15,411 2,820 543 351 (601) (5,490) 335 (815) (41) 337 (803) (766) 2,028 2,174 Amounts in millions; Years ended June 30 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR OPERATING ACTIVITIES Net earnings Depreciation and amortization Loss on early extinguishment of debt Share-based compensation expense Deferred income taxes Gain on sale of assets Venczucla deconsolidation charge Goodwill and intangible asset impairment charges Change in accounts receivable Change in inventories Change in accounts payable, accrued and other liabilities Change in other operating assets and liabilities Other TOTAL OPERATING ACTIVITIES INVESTING ACTIVITIES Capital expenditures Proceeds from asset sales Cash related to deconsolidated Venezuela operations Acquisitions, net of cash acquired Purchases of short-term investments Proceeds from sales and maturities of short-term investments Pre-divestiture addition of restricted cash related to the Beauty Brands divestiture Cash transferred al closing related to the Beauty Brands divestiture Release of restricted cash upon closing of the Beauty Brands divestiture Cash transferred in Batteries divestiture Change in other investments TOTAL INVESTING ACTIVITIES (322) 71 (149) (43) 162 450 35 116 1,285 204 184 15,435 349 313 928 (976) 746 14,608 12,753 (3,384) 571 (3,314) 432 (3,736) 4,498 (908) (137) (3,647) 1,203 (16) (4,843) 1,488 (874) (475) 1,870 (186) (2,815) 1,354 (996) (26) (5,689) (143) 93 (5.575) (163) (2.890) 2,826 FINANCING ACTIVITIES Dividends to shareholders (7,236) (7,436) (7,287) Change in short-term debt 2,727 (418) (2,580) Additions to long-term debt 3,603 3,916 2,138 Reductions of long-term debt (4,931) (1) (2,213) (3,512) Treasury stock purchases (5,204) (4,004) (4,604) Treasury stock from cash infused in Batteries divestiture (1,730) Impact of stock options and other 2,473 2,672 TOTAL FINANCING ACTIVITIES (8,568) (9,213) (13,019) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (29) (381) (411) CHANGE IN CASH AND CASH EQUIVALENTS (1,533) 266 (1,712) CASH AND CASH EQUIVALENTS, END OF YEAR $ 5,569 $ 7,102 $ 6,836 SUPPLEMENTAL DISCLOSURE Cash payments for interest $ 518 $ 569 $ 678 Cash payment for income taxes 3,714 3,730 4,558 Divestiture of Batteries business in exchange for shares of P&G stock(2) 4,213 Divestiture of Beauty business in exchange for shares of P&G stock and assumption of debt 11,360 Assets acquired through non-cash capital leases are immaterial for all periods. (1) Includes $543 of costs related to early extinguishment of debt. (2) Includes $1,730 from cash infused into the Batteries business pursuant to the divestiture agreement (see Note 13). See accompanying Notes to Consolidated Financial Statements