Proctor and Gamble 2005 Annual Report Download - page 64
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Please find page 64 of the 2005 Proctor and Gamble annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Management’sDiscussionandAnalysisTheProcter&GambleCompanyandSubsidiaries
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Off-BalanceSheetArrangements
Wedonothaveoff-balancesheetfinancingarrangements,including
variable interest entities, under FASB Interpretation No. 46,
“ConsolidationofVariableInterestEntities,”thathaveamaterial
impactonourfinancialstatements.
PurchaseCommitments
Wehavepurchasecommitmentsformaterials,supplies,servicesand
property,plantandequipmentaspartofthenormalcourseofbusiness.
Duetotheproprietarynatureofmanyofourmaterialsandprocesses,
certainsupplycontractscontainpenaltyprovisionsforearlytermination.
Wedonotexpecttoincurpenaltypaymentsundertheseprovisionsthat
wouldmateriallyaffectourfinancialcondition,cashflowsorresultsof
operationsinanyindividualyear.
OperatingLeases
Weleasecertainpropertyandequipmentforvaryingperiods.Future
minimumrentalcommitmentsundernoncancelableoperatingleases
areasfollows:2006-$215;2007-$162;2008-$126;2009-$114;
2010-$101;and$259thereafter.
Litigation
Wearesubjecttovariouslawsuitsandclaimswithrespecttomatters
suchasgovernmentalregulations,incometaxesandotheractions
arisingoutofthenormalcourseofbusiness.Wearealsosubjectto
contingenciespursuanttoenvironmentallawsandregulationsthat
inthefuturemayrequireustotakeactiontocorrecttheeffectson
theenvironmentofpriormanufacturingandwastedisposalpractices.
Accruedenvironmentalliabilitieswerenotmaterial.
Whileconsiderableuncertaintyexists,intheopinionofmanagement
andourcounsel,theultimateresolutionofthevariouslawsuitsand
claimswillnotmateriallyaffectourfinancialcondition,cashflowsor
resultsofoperations.
Note11SegmentInformation
WeareorganizedunderthreeGlobalBusinessUnitsasfollows:
•P&GBeautyincludesretailandprofessionalhaircare,skincare,
femininecare,cosmetics,finefragrancesandpersonalcleansing.
•P&GFamilyHealthincludestheHealthCareandBabyCareand
FamilyCarebusinesses.HealthCareincludesoralcare,personal
healthcare,pharmaceuticalsandpethealthandnutrition.Baby
CareandFamilyCareincludesdiapers,babywipes,bathtissueand
kitchentowels.
•P&GHouseholdCareincludestheFabricCareandHomeCareand
SnacksandCoffeebusinesses.FabricCareandHomeCareincludes
laundrydetergents,dishcare,fabricenhancers,surfacecareandaircare.
SnacksandCoffeeincludescoffee,snacksandcommercialproducts.
UnderU.S.GAAP,wehavefivereportablesegments:P&GBeauty;
HealthCare;BabyCareandFamilyCare;FabricCareandHomeCare;
andSnacksandCoffee.Theaccountingpoliciesofthebusinessesare
generallythesameasthosedescribedinNote1,SummaryofSignificant
AccountingPolicies.DifferencesfromthesepoliciesandU.S.GAAP
primarilyreflect:incometaxes,whicharereflectedinthebusinesses
usingestimatedlocalstatutoryrates;therecordingoffixedassetsat
historicalexchangeratesincertainhighinflationeconomies;andthe
treatmentofcertainunconsolidatedinvestees.Certainunconsolidated
investeesaremanagedasintegralpartsofourbusinessunitsfor
managementreportingpurposes.Accordingly,thesepartiallyowned
operationsarereflectedasconsolidatedsubsidiariesinbusinessresults,
with100%recognitionoftheindividualincomestatementlineitems
throughbefore-taxearnings.Eliminationstoadjusttheselineitemsto
U.S.GAAPareincludedinCorporate.Indeterminingafter-taxearnings
forthebusinesses,weeliminatetheshareofearningsapplicableto
otherownershipinterests,inamannersimilartominorityinterest,and
applystatutorytaxrates.Adjustmentstoarriveatoureffectivetaxrate
areincludedinCorporate.
Corporateincludescertainoperatingandnon-operatingactivities
thatarenotreflectedintheoperatingresultsusedinternallyto
measureandevaluatethebusinesses,aswellaseliminationstoadjust
managementreportingprinciplestoU.S.GAAP.Operatingactivities
inCorporateincludetheresultsofincidentalbusinessesmanagedat
thecorporatelevelalongwiththeeliminationofindividualrevenues
andexpensesgeneratedbycompaniesoverwhichweexertsignificant
influence,butdonotcontrol.Operatingelementsalsocomprise
certainemployeebenefitcostsandothergeneralcorporateitems.The
non-operatingelementsincludefinancingandinvestingactivities.In
addition,Corporateincludesthehistoricalresultsofcertaindivested
businesses,includingtheJuicebusiness,whichwasdivestedinAugust
of2004.Corporateassetsprimarilyincludecash,investmentsecurities
andgoodwill.
WehadnetsalesintheU.S.of$25,342,$23,688and$21,853for
theyearsendedJune30,2005,2004and2003,respectively.Assetsin
theU.S.totaled$25,399and$23,687asofJune30,2005and2004,
respectively.
Ourlargestcustomer,Wal-MartStores,Inc.anditsaffiliates,accounted
for16%,17%and18%ofconsolidatednetsalesin2005,2004and
2003,respectively.
NotestoConsolidatedFinancialStatementsTheProcter&GambleCompanyandSubsidiaries
Millionsofdollarsexceptpershareamountsorotherwisespecified.