Proctor and Gamble 2016 Annual Report Download - page 20

6 The Procter & Gamble Company
objectives. Specifically, our financial results could be
adversely impacted by the dilutive impacts from the loss of
earnings associated with divested brands. Our financial results
could also be impacted in the event of acquisitions or joint
venture activities if: 1) changes in the cash flows or other
market-based assumptions cause the value of acquired assets
to fall below book value, or 2) we are not able to deliver the
expected cost and growth synergies associated with such
acquisitions and joint ventures, which could also have an
impact on goodwill and intangible assets.
Our business results depend on our ability to successfully
manage productivity improvements and ongoing
organizational change.
Our financial projections assume certain ongoing productivity
improvements and cost savings, including staffing adjustments
as well as employee departures. Failure to deliver these
planned productivity improvements and cost savings, while
continuing to invest in business growth, could adversely impact
our financial results. Additionally, successfully executing
management transitions at leadership levels of the Company
and retention of key employees is critical to our business
success. We are generally a build-from-within company and
our success is dependent on identifying, developing and
retaining key employees to provide uninterrupted leadership
and direction for our business. This includes developing and
retaining organizational capabilities in key growth markets
where the depth of skilled or experienced employees may be
limited and competition for these resources is intense, as well
as continuing the development and execution of robust
leadership succession plans.
The United Kingdom’s departure from the European
Union could adversely impact our business and financial
results.
On June 23, 2016, the United Kingdom held a referendum in
which a majority of voters voted for the United Kingdom to
exit the European Union (“Brexit”), the announcement of
which resulted in significant currency exchange rate
fluctuations and volatility in global stock markets. It is
expected that the British government will commence
negotiations to determine the terms of Brexit. Given the lack
of comparable precedent, the implications of Brexit or how
such implications might affect the Company are unclear. Brexit
could, among other things, disrupt trade and the free movement
of goods, services and people between the United Kingdom
and the European Union or other countries as well as create
legal and global economic uncertainty. These and other
potential implications of Brexit could adversely affect the
Company’s business and financial results.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
In the U.S., we own and operate 24 manufacturing sites located
in 18 different states or territories. In addition, we own and
operate 97 manufacturing sites in 38 other countries. Many of
the domestic and international sites manufacture products for
multiple businesses. Beauty products are manufactured at 34
of these locations; Grooming products at 21; Health Care
products at 17; Fabric & Home Care products at 46; and Baby,
Feminine & Family Care at 42. Management believes that the
Company's manufacturing sites are adequate to support the
business and that the properties and equipment have been well
maintained.
Item 3. Legal Proceedings.
The Company is subject, from time to time, to certain legal
proceedings and claims arising out of our business, which
cover a wide range of matters, including antitrust and trade
regulation, product liability, advertising, contracts,
environmental issues, patent and trademark matters, labor and
employment matters and tax. See Note 12 to our Consolidated
Financial Statements for information on certain legal
proceedings for which there are contingencies.
This item should be read in conjunction with the Company's
Risk Factors in Part I, Item 1A for additional information.
Item 4. Mine Safety Disclosure.
Not applicable.