Proctor and Gamble 2012 Annual Report Download - page 59
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Please find page 59 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.The Procter & Gamble Company 57
Amounts in millions of dollars except per share amounts or as otherwise specified.
Estimated amortization expense over the next five fiscal
years is as follows:
Years ended June 30 2013 2014 2015 2016 2017
Estimated
amortization
expense $ 481 $ 448 $ 419 $ 381 $ 345
Such estimates do not reflect the impact of future foreign
exchange rate changes.
NOTE 3
SUPPLEMENTAL FINANCIAL INFORMATION
Selected components of current and noncurrent liabilities
were as follows:
June 30 2012 2011
ACCRUED AND OTHER
LIABILITIES - CURRENT
Marketing and promotion $ 2,880 $ 3,058
Compensation expenses 1,660 1,753
Restructuring reserves 343 151
Taxes payable 414 786
Legal and environmental 264 885
Other 2,728 2,657
TOTAL 8,289 9,290
OTHER NONCURRENT
LIABILITIES
Pension benefits $ 5,684 $ 4,388
Other postretirement benefits 3,270 1,887
Uncertain tax positions 2,245 2,326
Other 891 1,356
TOTAL 12,090 9,957
RESTRUCTURING PROGRAM
The Company has historically incurred an ongoing annual
level of restructuring-type activities to maintain a
competitive cost structure, including manufacturing and
workforce optimization. Before tax costs incurred under the
ongoing program have generally ranged from $250 to $500
annually. In February 2012, the Company announced a
productivity and cost savings plan to reduce costs in the
areas of supply chain, research and development, marketing
and overheads. The program was designed to accelerate
cost reductions by streamlining management decision
making, manufacturing and other work processes in order to
help fund the Company's growth strategy. The Company
expects to incur approximately $3.5 billion in before-tax
restructuring costs over a four year period, including costs
incurred as part of this plan and the ongoing plan. The
Company expects to incur more than half of the costs under
this plan by the end of fiscal 2013, with the remainder
incurred in fiscal years 2014 and 2015.
The restructuring activities will be executed across the
Company's centralized organization as well as across
virtually all of its MDO and GBU organizations. These
restructuring activities include a plan for a net reduction in
non-manufacturing overhead personnel of approximately
5,700 by the end of fiscal 2013. This is being done via the
elimination of duplicate work, simplification through the use
of technology, and the optimization of the various functional
organizations, the number of business units and of the
Company's global footprint. In addition, the plan includes
integration of newly acquired companies, optimization of the
supply chain and other manufacturing processes.
Costs incurred under the plan will consist primarily of costs
to separate employees and asset-related costs to exit
facilities. The Company will also incur other types of costs
outlined below as a direct result of the plan. For the year
ended June 30, 2012, the Company incurred charges of $1.1
billion. Approximately $746 of these charges were recorded
in selling, general and administrative expense. The
remainder is included in cost of products sold.
The following table presents accrued restructuring activity
for the year ended June 30, 2012:
Separations
Asset
Related
Costs Other Total
Reserve Balance
June 30, 2011 $ 121 $ — $ 30 $ 151
Charges 495 378 179 1,052
Cash Spent (300) — (182) (482)
Charges against
Assets — (378) — (378)
Reserve Balance
June 30, 2012 316 — 27 343
Separation Costs
Employee separation charges for the year ended June 30,
2012 relate to severance packages for approximately 3,300
employees, of which 1,600 will exit the Company after June
30, 2012. These severance packages include approximately
2,250 related to non-manufacturing overhead personnel,
occurring primarily in North America and Western Europe.
The packages are predominantly voluntary and the amounts
are calculated based on salary levels and past years of
service. Severance costs related to voluntary separations are
generally charged to earnings when the employee accepts the
offer.
Asset-Related Costs
Asset-related costs consist of both asset write downs and
accelerated depreciation. Asset write downs relate to the
establishment of a new fair value basis for assets held-for-
sale or disposal. These assets were written down to the
lower of their current carrying basis or amounts expected to
be realized upon disposal, less minor disposal costs.