Proctor and Gamble 2012 Annual Report Download - page 18
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Please find page 18 of the 2012 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.16 The Procter & Gamble Company
the distribution of input materials and finished product to
customers. The prices we pay for materials and other
commodities are subject to fluctuation. When prices for
these items change, we may or may not pass the change to
our customers, depending on the magnitude and expected
duration of the change. The Company purchases a
substantial variety of other raw and packaging materials,
none of which is material to our business taken as a whole.
Trademarks and Patents. We own or have licenses
under patents and registered trademarks which are used in
connection with our activity in all businesses. Some of these
patents or licenses cover significant product formulation and
processes used to manufacture our products. The trademarks
are important to the overall marketing and branding of our
products. All major products and trademarks in each
business are registered. In part, our success can be attributed
to the existence and continued protection of these
trademarks, patents and licenses.
Competitive Condition. The markets in which our
products are sold are highly competitive. Our products
compete against similar products of many large and small
companies, including well-known global competitors. In
many of the markets and industry segments in which we sell
our products, we compete against other branded products as
well as retailers' private-label brands. We are well positioned
in the industry segments and markets in which we operate -
often holding a leadership or significant market share
position. We support our products with advertising,
promotions and other vehicles to build awareness of our
brands in conjunction with an extensive sales force. We
believe this combination provides the most efficient method
of marketing for these types of products. Product quality,
performance, value and packaging are also important
competitive factors.
Research and Development Expenditures.
Research and development expenditures enable us to
develop technologies and obtain patents across all categories
in order to meet the needs and improve the lives of our
consumers. Total research and development expenses were
$2.0 billion in 2012 and 2011, and $1.9 billion in 2010.
Expenditures for Environmental Compliance.
Expenditures for compliance with federal, state and local
environmental laws and regulations are fairly consistent
from year to year and are not material to the Company. No
material change is expected in fiscal year 2013.
Employees. Total number of employees is an
estimate of total Company employees excluding interns, co-
ops and employees of joint ventures. Historical numbers
include employees of discontinued operations.
Total Number of Employees
2012 126,000
2011 129,000
2010 127,000
2009 132,000
2008 135,000
2007 135,000
Financial Information about Foreign and Domestic
Operations
Net sales in the United States account for
approximately 35% of total net sales. No other individual
country exceeded 10% of total net sales. Operations outside
the United States are generally characterized by the same
conditions discussed in the description of the business above
and may be affected by additional factors including changing
currency values, different rates of inflation, economic
growth and political and economic uncertainties and
disruptions. Our sales by geography for the fiscal years
ended June 30 were as follows:
2012 2011 2010
North America (1) 39% 41% 42%
Western Europe 19% 20% 20%
Asia 18% 16% 15%
Latin America 10% 9% 9%
CEEMEA (2) 14% 14% 14%
(1) North America includes results for the United States and
Canada only.
(2) CEEMEA includes Central and Eastern Europe, Middle East
and Africa.
Net sales and assets in the United States and internationally
were as follows (in billions):
United States International
Net Sales (for the year ended June 30)
2012 $29.5 $54.2
2011 $29.9 $51.2
2010 $29.5 $48.1
Assets (as of June 30)
2012 $68.0 $64.2
2011 $70.3 $68.1
2010 $70.1 $58.1
Item 1A. Risk Factors.
The following discussion of “risk factors” identifies
the most significant factors that may adversely affect our
business, operations, financial position or future financial
performance. This information should be read in conjunction
with MD&A and the consolidated financial statements and
related notes incorporated by reference into this report. The