Proctor and Gamble 2016 Annual Report Download - page 39

The Procter & Gamble Company 25
have paid a dividend for 126 years, every year since our
incorporation in 1890.
Long-Term and Short-Term Debt. We maintain debt levels
we consider appropriate after evaluating a number of factors,
including cash flow expectations, cash requirements for
ongoing operations, investment and financing plans (including
acquisitions and share repurchase activities) and the overall
cost of capital. Total debt was $30.6 billion as of June 30, 2016
and $30.3 billion as of June 30, 2015.
Treasury Purchases. Total share repurchases were $4.0 billion
in 2016 and $4.6 billion in 2015. In addition, the cash infusion
of $1.7 billion in the Batteries divestiture was reflected as a
purchase of treasury stock.
Liquidity
At June 30, 2016, our current assets exceeded current liabilities
by $3.0 billion largely due to current assets and current
liabilities of the Beauty Brands business held for sale.
Excluding current assets and current liabilities of the Beauty
Brands business held for sale, our current liabilities exceeded
current assets by $1.8 billion, largely due to short-term
borrowings under our commercial paper program. We
anticipate being able to support our short-term liquidity and
operating needs largely through cash generated from
operations. The Company regularly assesses its cash needs
and the available sources to fund these needs. As of June 30,
2016, $11.0 billion of the Company’s cash, cash equivalents
and marketable securities is held off-shore by foreign
subsidiaries. Amounts held by foreign subsidiaries are
generally subject to U.S. income taxation on repatriation to the
U.S. We do not expect restrictions or taxes on repatriation of
cash held outside of the U.S. to have a material effect on our
overall liquidity, financial condition or the results of operations
for the foreseeable future. Of the June 30, 2016 balance of off-
shore cash, cash equivalents and marketable securities, the
majority relates to various Western European countries. As of
June 30, 2016, we did not have material cash, cash equivalents
and marketable securities balances in any country subject to
exchange controls that significantly restrict our ability to
access or repatriate the funds.
We utilize short- and long-term debt to fund discretionary
items, such as acquisitions and share repurchases. We have
strong short- and long-term debt ratings, which have enabled,
and should continue to enable, us to refinance our debt as it
becomes due at favorable rates in commercial paper and bond
markets. In addition, we have agreements with a diverse group
of financial institutions that, if needed, should provide
sufficient credit funding to meet short-term financing
requirements.
On June 30, 2016, our short-term credit ratings were P-1
(Moody's) and A-1+ (Standard & Poor's), while our long-term
credit ratings were Aa3 (Moody's) and AA- (Standard &
Poor's), all with a stable outlook.
We maintain bank credit facilities to support our ongoing
commercial paper program. The current facility is an $8.0
billion facility split between a $3.2 billion five-year facility
and a $4.8 billion 364-day facility, which expire in November
2020 and November 2016, respectively. The 364-day facility
can be extended for certain periods of time as specified in the
terms of the credit agreement. These facilities are currently
undrawn and we anticipate that they will remain undrawn.
These credit facilities do not have cross-default or ratings
triggers, nor do they have material adverse events clauses,
except at the time of signing. In addition to these credit
facilities, we have an automatically effective registration
statement on Form S-3 filed with the SEC that is available for
registered offerings of short- or long-term debt securities. For
additional details on debt see Note 10 to the Consolidated
Financial Statements.
Guarantees and Other Off-Balance Sheet Arrangements
We do not have guarantees or other off-balance sheet financing
arrangements, including variable interest entities, which we
believe could have a material impact on financial condition or
liquidity.