Proctor and Gamble 2012 Annual Report Download - page 73
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Amounts in millions of dollars except per share amounts or as otherwise specified.
Deferred income tax assets and liabilities were comprised of
the following:
June 30 2012 2011
DEFERRED TAX ASSETS
Pension and postretirement benefits $ 2,366 $ 1,406
Stock-based compensation 1,304 1,284
Loss and other carryforwards 853 874
Goodwill and other intangible assets 78 298
Accrued marketing and promotion 238 217
Fixed assets 165 111
Unrealized loss on financial and
foreign exchange transactions 363 770
Accrued interest and taxes 28 28
Inventory 58 52
Other 761 834
Valuation allowances (375) (293)
TOTAL 5,839 5,581
DEFERRED TAX LIABILITIES
Goodwill and other intangible assets $11,816 $12,206
Fixed assets 1,719 1,742
Other 286 211
TOTAL 13,821 14,159
Net operating loss carryforwards were $2.8 billion and $2.7
billion at June 30, 2012 and 2011, respectively. If unused,
$1.2 billion will expire between 2013 and 2032. The
remainder, totaling $1.6 billion at June 30, 2012, may be
carried forward indefinitely.
NOTE 10
COMMITMENTS AND CONTINGENCIES
Guarantees
In conjunction with certain transactions, primarily
divestitures, we may provide routine indemnifications (e.g.,
indemnification for representations and warranties and
retention of previously existing environmental, tax and
employee liabilities) for which terms range in duration and,
in some circumstances, are not explicitly defined. The
maximum obligation under some indemnifications is also
not explicitly stated and, as a result, the overall amount of
these obligations cannot be reasonably estimated. Other than
obligations recorded as liabilities at the time of divestiture,
we have not made significant payments for these
indemnifications. We believe that if we were to incur a loss
on any of these matters, the loss would not have a material
effect on our financial position, results of operations or cash
flows.
In certain situations, we guarantee loans for suppliers and
customers. The total amount of guarantees issued under such
arrangements is not material.
Off-Balance Sheet Arrangements
We do not have off-balance sheet financing arrangements,
including variable interest entities, that have a material
impact on our financial statements.
Purchase Commitments and Operating Leases
We have purchase commitments for materials, supplies,
services and property, plant and equipment as part of the
normal course of business. Commitments made under take-
or-pay obligations are as follows:
June 30 2013 2014 2015 2016 2017 Thereafter
Purchase
obligations $1,094 $ 333 $ 263 $ 119 $ 96 $ 282
Such amounts represent future purchases in line with
expected usage to obtain favorable pricing. Approximately
22% of our purchase commitments relate to service contracts
for information technology, human resources management
and facilities management activities that have been
outsourced to third-party suppliers. Due to the proprietary
nature of many of our materials and processes, certain
supply contracts contain penalty provisions for early
termination. We do not expect to incur penalty payments
under these provisions that would materially affect our
financial position, results of operations or cash flows.
Our partner in a joint venture that holds a portion of our
business in Spain has informed us of their intent to exercise
their rights to put their interest in the joint venture to us.
The put price is based on a formula tied to the venture's
earnings and approximates fair value. Upon closing of the
transaction, which is subject to regulatory approvals, we
would account for the transaction as a purchase, whereby we
would record the entire underlying business at fair value and
recognize a holding gain for the portion of the venture
currently held by us. The purchase price for the partner's
interest would be approximately $1 billion based on current
exchange rates, and the resulting holding gain on our current
interest in the venture would be approximately $400 to $600.
We also lease certain property and equipment for varying
periods. Future minimum rental commitments under non-
cancelable operating leases, net of guaranteed sublease
income, are as follows:
June 30 2013 2014 2015 2016 2017 Thereafter
Operating
leases $ 289 $ 263 $ 235 $ 223 $ 170 $ 637
Litigation
We are subject to various legal proceedings and claims
arising out of our business which cover a wide range of
matters such as antitrust, trade and other governmental
regulations, product liability, patent and trademark matters,
advertising, contracts, environmental issues, labor and
employments matters and income and other taxes.