Proctor and Gamble 2013 Annual Report Download - page 16

14 The Procter & Gamble Company
other commodities are subject to fluctuation. When prices
for these items change, we may or may not pass the change
to our customers. 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
2013, 2012 and 2011.
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 2014.
Employees. Total number of employees is an estimate of
total Company employees excluding interns, co-ops and
employees of joint ventures. The number of employees
includes manufacturing and non-manufacturing employees.
A discussion of progress on non-manufacturing enrollment
objectives is included in Note 3 to our Consolidated
Financial Statements. Historical numbers include employees
of discontinued operations.
Total Number of Employees
2013 121,000
2012 126,000
2011 129,000
2010 127,000
2009 132,000
2008 135,000
Financial Information about Foreign and Domestic
Operations
Net sales in the United States account for approximately
36% of total net sales. No other individual country exceeds
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:
2013 2012 2011
North America (1) 39% 39% 41%
Western Europe 18% 19% 20%
Asia 18% 18% 16%
Latin America 10% 10% 9%
CEEMEA (2) 15% 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)
2013 $30.3 $53.9
2012 $29.5 $54.2
2011 $29.9 $51.2
Assets (June 30)
2013 $68.3 $71.0
2012 $68.0 $64.2
2011 $70.3 $68.1
Item 1A. Risk Factors.
We discuss our expectations regarding future performance,
events and outcomes, such as our business outlook and
objectives in this Form 10-K, other quarterly reports, press
releases and other written and oral communications. All
statements, except for historical and present factual
information, are “forward-looking statements” and are based
on financial data and business plans available only as of the