Proctor and Gamble 2013 Annual Report Download - page 40

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38 The Procter & Gamble Company
cash in 2012 primarily for the acquisition of New Chapter, a
vitamins supplement business.
Proceeds from Divestitures and Other Asset Sales.
Proceeds from asset sales contributed $584 million in cash in
2013 mainly due to the divestitures of our bleach business in
Italy and the Braun household appliances business. Proceeds
from asset sales contributed $2.9 billion to cash in 2012
mainly due to the sale of our snacks business.
Financing Cash Flows
Dividend Payments. Our first discretionary use of cash is
dividend payments. Dividends per common share increased
7% to $2.29 per share in 2013. Total dividend payments to
common and preferred shareholders were $6.5 billion in
2013 and $6.1 billion in 2012. In April 2013, the Board of
Directors declared an increase in our quarterly dividend
from $0.5620 to $0.6015 per share on Common Stock and
Series A and B ESOP Convertible Class A Preferred Stock.
This represents a 7% increase compared to the prior
quarterly dividend and is the 57th consecutive year that our
dividend has increased. We have paid a dividend in 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 $31.5 billion as of
June 30, 2013 and $29.8 billion as of June 30, 2012. Our
total debt increased in 2013 mainly due to debt issuances
and an increase in commercial paper outstanding, partially
offset by bond maturities.
Treasury Purchases. Total share repurchases were $6.0
billion in 2013 and $4.0 billion in 2012.
Liquidity
At June 30, 2013, our current liabilities exceeded current
assets by $6.0 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.
Additionally, a portion of our cash is held off-shore by
foreign subsidiaries. The Company regularly assesses its
cash needs and the available sources to fund these needs and
we do not expect restrictions or taxes on repatriation of cash
held outside of the United States to have a material effect on
our overall liquidity, financial condition or the results of
operations for the foreseeable future. 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, 2013, our short-term credit ratings were P-1
(Moody's) and A-1+ (Standard & Poor's), while our long-
term credit ratings are Aa3 (Moody's) and AA- (Standard &
Poor's), both with a stable outlook.
We maintain bank credit facilities to support our ongoing
commercial paper program. The current facility is an $11.0
billion facility split between a $7.0 billion 5-year facility and
a $4.0 billion 364-day facility, which expire in August 2018
and August 2014, respectively. The 364-day facility can be
extended for certain periods of time as specified in, and in
accordance with, the terms of the credit agreement. These
facilities are currently undrawn and we anticipate that they
will remain largely undrawn for the foreseeable future.
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.
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.