Proctor and Gamble 2001 Annual Report Download - page 21

These forward-looking statements are based on assumptions and
estimates regarding competitive activity, pricing, product
introductions, economic conditions, technological innovation,
currency movements, governmental action and the development of
certain markets. Among the key factors necessary to achieve the
Company’s goals are: (1) the successful execution of Organization
2005, including achievement of expected cost and tax savings and
successful management of organizational and work process
restructuring; (2) the ability to achieve business plans, including
volume growth and pricing plans, despite high levels of competitive
activity, especially with respect to the product categories and
geographical markets in which the Company has chosen to focus;
(3) the ability to maintain key customer relationships; (4) the
achievement of growth in significant developing markets such as
China, Korea, Mexico, the Southern Cone of Latin America and the
countries of Central and Eastern Europe; (5) the ability to
successfully manage regulatory, tax and legal matters, including
resolution of pending matters within current estimates; (6) the
successful and timely execution of planned brand divestitures; (7)
the ability to successfully implement cost improvement plans in
manufacturing and overhead areas; (8) the timely execution of
definitive agreements and the receipt of timely and successful
regulatory clearances with respect to a transaction with The Coca-
Cola Company; (9) the timely and successful receipt of regulatory
clearances and subsequent successful integration of the Clairol
business; and (10) the ability to successfully manage currency,
interest rate and certain commodity cost exposures. If the
Company’s assumptions and estimates are incorrect or do not come
to fruition, or if the Company does not achieve all of these key
factors, then the Company’s actual performance could vary
materially from the forward-looking statements made herein.
approximately $160 million before tax ($133 million after tax) in
2001, $0 in 2000 and $160 million before tax ($100 million after
tax) in 1999. Asset write-downs are not expected to significantly
impact future annual depreciation expense.
Other contains charges incurred as a direct result of restructuring
decisions, including relocation, training, the establishment of global
business services and the new legal and organization structure of
Organization 2005, and discontinuation of initiatives. These costs
are charged to the applicable income statement line item based on
the underlying nature of the charge.
Most restructuring accruals represent current liabilities. Reserve
balances were $460 million, $88 million and $44 million at June
30, 2001, 2000 and 1999, respectively. During the current year,
approximately 40% of restructuring charges were cash. Going
forward, approximately 70% of future charges are expected to be
cash – primarily separations.
Savings from the restructuring program are difficult to estimate,
given the nature of the activities, the corollary benefits achieved,
timing and the degree of reinvestment. Overall, the program is
expected to deliver nearly $2 billion after tax of annual savings by
fiscal 2004. Estimated incremental savings were $235 million in
2001 and $65 million in 2000. Savings are expected to ramp up
during 2002 and are estimated to increase by approximately $600
million after tax.
FORWARD-LOOKING STATEMENT
The Company has made and will make certain forward-looking
statements in the Annual Report and in other contexts relating to
volume growth, increases in market shares, Organization 2005,
financial goals and cost reduction, among others.
The Procter & Gamble Company and Subsidiaries 19
Financial Review (continued)