Proctor and Gamble 2015 Annual Report Download - page 16

The Procter & Gamble Company 14
Our usiness is suect to numerous risks as a result of our
haing significant oerations and sales in international
markets, including foreign currenc fluctuations, currenc
exchange or ricing controls and localied olatilit.
e are a global company, with operations in approximately 70
countries and products sold in more than 180 countries and
territories around the world. e hold assets, incur liabilities,
earn revenues and pay expenses in a variety of currencies other
than the U.S. dollar, and our operations outside the U.S.
generate a significant portion of our net revenue. Fluctuations
in exchange rates for foreign currencies, such as the recent
volatility in the Russian ruble, may reduce the U.S. dollar value
of revenues, profits and cash flows we receive from non-U.S.
markets, increase our supply costs (as measured in U.S. dollars)
in those markets, or otherwise adversely impact our business
results or financial condition. Moreover, discriminatory or
conflicting fiscal policies in different countries could adversely
affect our results. See also the Results of Operations and Cash
Flow, Financial Condition and Liquidity sections of the MD&A
and Note 5 to our Consolidated Financial Statements.
e also have sizable businesses and maintain local currency
cash balances in a number of foreign countries with exchange,
import authorization, pricing or other controls, including
Argentina, China, Egypt, Greece, India, Nigeria, Ukraine and
enezuela. Our results of operations and financial condition
could be adversely impacted if we are unable to successfully
manage such controls and repatriate earnings from overseas,
or if new or increased tariffs, quotas, exchange or price controls,
trade barriers or similar restrictions are imposed on our
business outside the U.S., such as the current year impact of
deconsolidating our enezuelan subsidiaries as discussed in
this Form 10-K.
Additionally, our business, operations or employees may be
affected by political volatility, labor market disruptions or other
crises or vulnerabilities in individual countries or regions,
including political instability or upheaval, broad economic
instability or sovereign risk related to a default by or
deterioration in the credit worthiness of local governments,
particularly in emerging markets, which could negatively
impact our financial condition or results of operations.
Uncertain gloal economic conditions, including
disrutions in credit markets or changes to our credit
rating, ma adersel imact demand for our roducts,
cause our customers and other usiness artners to suffer
financial hardshi or reduce our access to credit, all of
which could adersel imact our usiness.
Our business could be negatively impacted by reduced demand
for our products related to one or more significant local,
regional or global economic disruptions, such as: a slow-down
in the general economy reduced market growth rates tighter
credit markets for our suppliers, vendors or customers or the
inability to conduct day-to-day transactions through our
financial intermediaries to pay funds to or collect funds from
our customers, vendors and suppliers. Additionally, economic
conditions may cause our suppliers, distributors, contractors
or other third party partners to suffer financial difficulties that
they cannot overcome, resulting in their inability to provide us
with the materials and services we need, in which case our
business and results of operations could be adversely affected.
Customers may also suffer financial hardships due to economic
conditions such that their accounts become uncollectible or are
subject to longer collection cycles. If we are unable to generate
sufficient income and cash flow, it could affect the Companys
ability to achieve expected share repurchase and dividend
payments.
Adisruption in the credit markets or a downgrade of our current
credit rating could increase our future borrowing costs and
impair our ability to access capital and credit markets on terms
commercially acceptable to us, which could adversely affect
our liquidity and capital resources or significantly increase our
cost of capital.
Disrution in our gloal sul chain ma negatiel
imact our usiness results.
Our ability to meet our customers needs and achieve cost
targets depends on our ability to maintain key manufacturing
and supply arrangements, including execution of our
previously-announced supply chain simplifications and certain
sole supplier or sole manufacturing plant arrangements. The
loss or disruption of such manufacturing and supply
arrangements, including for issues such as labor disputes, loss
or impairment of key manufacturing sites, inability to procure
sufficient raw or input materials, natural disasters, acts of war
or terrorism or other external factors over which we have no
control, could interrupt product supply and, if not effectively
managed and remedied, have an adverse impact on our
business, financial condition or results of operations.
Our usinesses face cost fluctuations and ressures that
could affect our usiness results.
Our costs are subject to fluctuations, particularly due to changes
in the prices of commodities and raw materials and the costs
of labor, transportation, energy, pension and healthcare.
Therefore, our business results are dependent, in part, on our
continued ability to manage these fluctuations through pricing
actions, cost saving projects and sourcing decisions, while
maintaining and improving margins and market share. In
addition, our financial projections include cost savings
described in our announced productivity plan. Failure to
manage these fluctuations and deliver the planned cost savings
could adversely impact our financial results.
Our ailit to meet our growth targets deends on
successful roduct, marketing and oerations innoation
and successful resonses to cometitie innoation.
e are a consumer products company that relies on continued
global demand for our brands and products. Achieving our
business results depends, in part, on successfully developing,
introducing and marketing new products and on making
significant improvements to our equipment and manufacturing
processes. The success of such innovation depends on our
ability to correctly anticipate customer and consumer
acceptance and trends, to obtain, maintain and enforce
necessary intellectual property protections and to avoid