-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Odypl7P7GwSEoOlG8OMogY+KxNWZYyZr+ccMyMSlsR+8jLbigM1Nv7HkenTuJbpg nakIZPuglaIuuB8J7kCxkw== 0000950135-98-004059.txt : 19980630 0000950135-98-004059.hdr.sgml : 19980630 ACCESSION NUMBER: 0000950135-98-004059 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980629 SROS: BSE SROS: NYSE SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GILLETTE CO CENTRAL INDEX KEY: 0000041499 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 041366970 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-00922 FILM NUMBER: 98656285 BUSINESS ADDRESS: STREET 1: PRUDENTIAL TOWER BLDG STREET 2: SUITE 4800 CITY: BOSTON STATE: MA ZIP: 02199 BUSINESS PHONE: 6174217000 MAIL ADDRESS: STREET 1: PRUDENTIAL TOWER BLDG STREET 2: SUITE 4800 CITY: BOSTON STATE: MA ZIP: 02199 FORMER COMPANY: FORMER CONFORMED NAME: GILLETTE SAFETY RAZOR CO DATE OF NAME CHANGE: 19660911 11-K 1 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROWPARK 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 Registration number 33-63707 A. Full title of the plan: THE GILLETTE COMPANY SAVINGS PLAN FOR ARROWPARK EMPLOYEES B. Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office: The Gillette Company Prudential Tower Building Boston, MA 02199 2 FINANCIAL STATEMENTS OF THE GILLETTE COMPANY SAVINGS PLAN FOR ARROWPARK EMPLOYEES The following audited financial statements with independent auditors' report thereon are enclosed with this report: 1. Statements of Net Assets Available for Plan Benefits as of December 31, 1997 and 1996. 2. Statements of Changes in Net Assets Available for Plan Benefits for each of the years in the three-year period ended December 31, 1997. EXHIBIT 23.2 Independent Auditor's Consent SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Advisory Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. THE GILLETTE COMPANY SAVINGS PLAN FOR ARROWPARK EMPLOYEES By /s/ Robert E. DiCenso ----------------------------------- Robert E. DiCenso Date: June 25, 1998 3 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Financial Statements December 31, 1997 and 1996 (With Independent Auditors' Report Thereon) 4 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Financial Statements December 31, 1997 and 1996 TABLE OF CONTENTS Page(s) ------- Independent Auditors' Report 1 Statements of Net Assets Available for Plan Benefits 2 Statements of Changes in Net Assets Available for Plan Benefits 3-4 Notes to Financial Statements 5-12 Note: Supplemental schedules required by the Employee Retirement Income Security Act of 1974, as amended (ERISA), have not been included due to their inclusion in master trust information filed with the Department of Labor of The Gillette Company Savings Plan Trust. 5 INDEPENDENT AUDITORS' REPORT The Savings Plan Committee The Gillette Company Savings Plan for Arrow Park Employees: We have audited the statements of net assets available for plan benefits of The Gillette Company Savings Plan for Arrow Park Employees as of December 31, 1997 and 1996 and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of The Gillette Company Savings Plan for Arrow Park Employees as of December 31, 1997 and 1996 and the changes in net assets available for plan benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The Fund Information in the statement of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the changes in net assets available for plan benefits of each fund. The Fund Information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. May 15, 1998 6 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Statements of Net Assets Available for Plan Benefits December 31, 1997 and 1996
1997 1996 ---- ---- Assets: Investment in the Savings Plan Trust $9,490,518 7,028,709 ---------- --------- Net assets available for plan benefits $9,490,518 7,028,709 ========== =========
See accompanying notes to financial statements. 2 7 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information For the year ended December 31, 1997
Fidelity Fidelity Retirement Fidelity Gillette Interme- Government U.S. Fidelity Company diate Fixed Money Fidelity Fidelity Equity Growth Stock Bond Income Market Magellan Balanced Index Company Fund Fund Fund Portfolio Fund Fund Portfolio Fund -------- -------- ------ ---------- -------- --------- --------- -------- Additions to net asset attributed to: Net investment income from the Savings Plan Trust $ 492,089 167 144,167 3,252 122,921 66,259 612,450 54,733 Contributions Employee contributions 251,531 -- 94,550 13,767 125,437 -- 89,540 67,735 Employer contributions 71,732 -- 28,931 3,689 34,366 -- 22,443 17,502 ---------- ------ ---------- ------ ------- -------- --------- ------- Total additions 815,352 167 267,648 20,708 282,724 66,259 724,433 139,970 Deductions from net assets attributed to: Benefit payments (8,070) -- (39,309) (211) (1,566) (8,231) (6,680) (6,855) Forfeitures (666) -- (104) (69) -- -- -- (86) ---------- ------ ---------- ------ ------- -------- --------- ------- Total deductions (8,736) -- (39,413) (280) (1,566) (8,231) (6,680) (6,941) Net increase prior to interfund transfers 806,616 167 228,235 20,428 281,158 58,028 717,753 133,029 Net transfers in (out) Loans issued (60,907) (237) (14,513) (1,063) (17,623) (2,172) (13,494) (6,386) Loans repaid 19,412 -- 13,490 165 13,495 -- 4,886 2,408 Other transfers 132,687 (10,142) (176,147) 39,745 2,835 (927,373) 131,219 23,985 ---------- ------ ---------- ------ ------- -------- --------- ------- 91,192 (10,379) (177,170) 38,847 (1,293) (929,545) 122,611 20,007 Net increase(decrease) 897,808 (10,212) 51,065 59,275 279,865 (871,517) 840,364 153,036 ---------- ------ ---------- ------ ------- -------- --------- ------- Net assets available for plan benefits Beginning of year 1,388,053 10,212 2,209,819 16,557 404,537 871,517 1,742,165 257,960 ---------- ------ ---------- ------ ------- -------- --------- ------- End of year $2,285,861 -- 2,260,884 75,832 684,402 -- 2,582,529 410,996 ========== ====== ========= ====== ======= ======== ========= ======= Fidelity Fidelity Fidelity Fidelity INVESCO U.S. Emerging Diversified Growth & Total Bond Participant Markets International Income Return Index Loan Fund Fund Fund Fund Fund Fund Total -------- ------------- -------- ------- -------- ----------- ----- Additions to net asset attributed to: Net investment income from the Savings Plan Trust (3,132) 1,616 13,250 102,039 1,690 -- 1,611,501 Contributions Employee contributions 3,215 1,508 7,937 65,143 11,865 -- 732,228 Employer contributions 865 319 1,836 17,745 2,898 -- 202,326 ------ ------ ------ ------- ------ ------- --------- Total additions 948 3,443 23,023 184,927 16,453 -- 2,546,055 Deductions from net assets attributed to: Benefit payments -- -- -- (9,740) -- (2,659) (83,321) Forfeitures -- -- -- -- -- -- (925) ------ ------ ------ ------- ------ ------- --------- Total deductions -- -- -- (9,740) -- (2,659) (84,246) Net increase prior to interfund transfers 948 3,443 23,023 175,187 16,453 (2,659) 2,461,809 Net transfers in (out) Loans issued -- -- (2,182) (11,724) (1,157) 131,458 -- Loans repaid -- -- -- 3,914 104 (57,874) -- Other transfers 4,350 20,352 78,650 662,394 17,445 -- -- ------ ------ ------ ------- ------ ------- --------- 4,350 20,352 76,468 654,584 16,392 73,584 -- Net increase(decrease) 5,298 23,795 99,491 829,771 32,845 70,925 2,461,809 Net assets available for plan benefits Beginning of year -- -- -- -- -- 127,889 7,028,709 ------ ------ ------ ------- ------ ------- --------- End of year 5,298 23,795 99,491 829,771 32,845 198,814 9,490,518 ====== ====== ====== ======= ====== ======= =========
See accompanying notes to financial statements. 3 8 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information For the year ended December 31, 1996
Guaranteed Gillette Fidelity Investment Payment Company Intermediate Fixed Contract Balanced Equity Reserve Stock Bond Income Fund Fund Fund Account Fund Fund Fund ----------- -------- ------ -------- -------- ------------ ------ Additions to net asset attributed to: Net investment income from the Savings Plan Trust $ -- -- -- -- 342,697 301 149,500 ----------- ---------- ---------- -------- ---------- ---------- ---------- Contributions Employee contributions -- -- -- -- 205,507 7,689 112,485 Employer contributions -- -- -- -- 59,594 2,529 34,394 ----------- ---------- ---------- -------- ---------- ---------- ---------- Total additions -- -- -- -- 607,798 10,519 296,379 Deductions from net assets attributed to: Benefit payments -- -- -- -- (73) (70) (44,051) Forfeitures -- -- -- -- (15) (14) (106) Transfer of assets to The Gillette Company Employees' Savings Plan (837,945) (807,218) (2,160,876) (141,374) -- -- -- ----------- ---------- ---------- -------- ---------- ---------- ---------- Total deductions (837,945) (807,218) (2,160,876) (141,374) (88) (84) (44,157) Net increase (decrease) prior to interfund transfers (837,945) (807,218) (2,160,876) (141,374) 607,710 10,435 252,222 Net transfers in (out) Loans issued -- -- -- -- (11,565) (269) (45,711) Loans repaid -- -- -- -- 13,677 46 8,575 Other transfers (2,392,998) (933,384) (1,827,499) (109,400) 778,231 -- 1,994,733 ----------- ---------- ---------- -------- ---------- ---------- ---------- (2,392,998) (933,384) (1,827,499) (109,400) 780,343 (223) 1,957,597 Net increase(decrease) (3,230,943) (1,740,602) (3,988,375) (250,774) 1,388,053 10,212 2,209,819 Net assets available for plan benefits Beginning of year 3,230,943 1,740,602 3,988,375 250,774 -- -- -- ----------- ---------- ---------- -------- ---------- ---------- ---------- End of year $ -- -- -- -- 1,388,053 10,212 2,209,819 =========== ========== ========== ======== ========== ========== ========== Fidelity Retirement Fidelity Fidelity Gov't Money Fidelity Fidelity U.S. Equity Growth Participant Market Magellan Balanced Index Company Loan Portfolio Fund Fund Portfolio Fund Fund Total ----------- -------- -------- ----------- -------- ----------- ----- Additions to net asset attributed to: Net investment income from the Savings Plan Trust 599 31,118 73,961 337,237 17,984 -- 953,397 Contributions Employee contributions 15,462 141,423 82,815 83,074 69,187 -- 717,642 Employer contributions 4,176 39,662 24,066 21,820 17,402 -- 203,643 ------ ------- ------- --------- ------- ------- --------- Total additions 20,237 212,203 180,842 442,131 104,573 -- 1,874,682 Deductions from net assets attributed to: Benefit payments (2,089) (989) (7,142) (6,682) -- (48,066) (109,162) Forfeitures 57 -- (14) -- -- -- (92) Transfer of assets to The Gillette Company Employees' Savings Plan -- -- -- -- -- -- (3,947,413) ------ ------- ------- --------- ------- ------- --------- Total deductions (2,032) (989) (7,156) (6,682) -- (48,066) (4,056,667) Net increase (decrease) prior to interfund transfers 18,205 211,214 173,686 435,449 104,573 (48,066) (2,181,985) Net transfers in (out) Loans issued (468) (11,097) (12,196) (23,130) (1,144) 105,580 -- Loans repaid 951 7,871 4,650 2,283 972 (39,025) -- Other transfers (2,131) 196,549 705,377 1,327,563 153,559 109,400 -- ------ ------- ------- --------- ------- ------- --------- (1,648) 193,323 697,831 1,306,716 153,387 175,955 -- Net increase(decrease) 16,557 404,537 871,517 1,742,165 257,960 127,889 (2,181,985) Net assets available for plan benefits Beginning of year -- -- -- -- -- -- 9,210,694 ------ ------- ------- --------- ------- ------- --------- End of year 16,557 404,537 871,517 1,742,165 257,960 127,889 7,028,709 ====== ======= ======= ========= ======= ======= =========
See accompanying notes to financial statements. 5 9 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Notes to Financial Statements December 31, 1997 and 1996 (1) DESCRIPTION OF THE PLAN The following brief description of The Gillette Company Savings Plan for Arrow Park Employees (the "Plan") is provided for general information purposes only. Participants should refer to the Plan document for more complete information. (a) GENERAL The Plan became effective on July 1, 1988 and is a contributory defined contribution plan covering all eligible employees of the Arrow Park facility of The Gillette Company's Stationary Products Group who are covered by a collective bargaining agreement and who have completed six full months of employment. The Plan was amended and restated in its entirety effective January 1, 1996 and The Gillette Company (the "Company") assumed sponsorship and administration of the Plan as of such date. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). (b) CONTRIBUTIONS Participants may elect to contribute in whole percentage increments up to 17% of their annual base compensation. The Company will make matching contributions on behalf of a participant equal to 50% of the participant's contribution up to 6% of the participants' annual compensation. (c) VESTING Participants immediately vest in their own contributions and actual earnings thereon. Vesting in company contributions occurs at a rate of 25% per year of service with full vesting after four years of service, upon attainment of age 65, or termination of employment due to death or disability. Nonvested Company contributions will be forfeited by participants who terminate employment and will be used to reduce future Company matching contributions. (d) PARTICIPANTS' ACCOUNTS A separate account is established for each participant at the time of enrollment in the Plan. The balance in each account is invested in accordance with the directions given by the participant in one or more of the Plan's investment fund offerings. The following funds were available for investment beginning January 1, 1996: GILLETTE COMPANY STOCK FUND Invests primarily in shares of The Gillette Company common stock. 6 10 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Notes to Financial Statements, Continued (1), CONTINUED FIDELITY INTERMEDIATE BOND FUND Invests primarily in intermediate maturity foreign and domestic bonds and seeks a high level of current income. During 1997, this fund was terminated as an investment option. FIXED INCOME FUND Seeks to preserve principal as well as generate interest income through investment in high quality short and intermediate term investment contracts as well as other instruments issued by insurance companies and banks. FIDELITY RETIREMENT GOVERNMENT MONEY MARKET FUND Seeks to keep invested principal stable while generating current interest or income by investing in high quality money market instruments issued or guaranteed by the U.S. government or its agencies. FIDELITY MAGELLAN FUND Seeks long-term capital appreciation by investing primarily in common stocks and other securities of all types of domestic and international companies in all industries. FIDELITY BALANCED FUND Seeks to provide the highest amount of income possible consistent with the preservation of capital by investing primarily in common and preferred stocks, and bonds. During 1997, this fund was terminated as an investment option. FIDELITY U.S. EQUITY INDEX FUND Seeks to provide investment results that correspond to a recognized index of stock market performance, and invests primarily in the common stocks of the companies that make up the designated stock index. FIDELITY GROWTH COMPANY FUND Seeks long-term capital appreciation by investing primarily in securities of domestic and foreign growth-oriented companies. INVESCO TOTAL RETURN FUND Seeks to provide high total return through capital growth and current income by investing in stocks and in fixed and variable income securities. This fund became a new investment option for participants in 1997. 11 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Notes to Financial Statements, Continued (1), CONTINUED FIDELITY DIVERSIFIED INTERNATIONAL Seeks capital growth by investing primarily in equity securities of companies located outside the U.S. Seeks stocks that are undervalued compared to industry norms in their countries. This fund became a new investment option for participants in 1997. FIDELITY U.S. BOND INDEX FUND Invests in investment grade (medium to high quality) or above with maturities of at least one year. This fund became a new investment option for participants in 1997. FIDELITY GROWTH & INCOME Seeks high total return through a combination of current income and capital appreciation. Invests primarily in U.S. and foreign stocks. This fund became a new investment option for participants in 1997. FIDELITY EMERGING MARKETS FUND Seeks capital appreciation from emerging markets around the world. This fund became a new investment option for participants in 1997. Each of the Funds may also hold a portion of its assets in short-term investments in order to meet liquidity needs for transfers, loans, and withdrawals. (e) PARTICIPANT LOANS The maximum loan available to each participant is the lesser of (1) $50,000 reduced by the highest outstanding loan balance due from the participant during the preceding twelve months, or (2) 50% of the participant's vested account balance, reduced by the current outstanding loan balance due from the participant. The minimum loan amount available to participants is $500. Each loan shall bear interest at a rate determined by the Savings Plan Committee. A participant must make a payment of principal and interest to the Plan on at least a quarterly basis. Repayment of the loan must be made over a period not to exceed five years. (f) PLAN EARNINGS As of the close of each business day, the Plan trustee is responsible for determining the fair market value of each of the investment options, which would include all accrued earnings. The increase or decrease in the fair market value of each investment fund since the preceding business day is allocated among the participant accounts invested in each fund based on the proportionate number of shares or units of the fund held by each participant at the close of the preceding business day. 8 12 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Notes to Financial Statements, Continued (1), CONTINUED (g) BENEFIT PAYMENTS Upon termination of employment, the participant or his or her surviving spouse or beneficiary, will receive a lump sum distribution of the participant's vested account balance, or if the account balance exceeds $3,500 at such time, he/she may elect to defer payment. Early withdrawals may also be made in the event of financial hardship and other circumstances, based upon special guidelines detailed in the Plan documents. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) BASIS OF ACCOUNTING The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses. Actual results could differ from those estimates. The accompanying financial statements are presented on the accrual basis of accounting. Benefits payable at year end are not accrued for as they are considered to be a component of the net assets available for plan benefits. (c) INVESTMENTS Investments are allocations of the assets of The Gillette Company Master Savings Plan Trust ("Savings Plan Trust") based upon the proportionate interest of the Plan in the trust. Investments of the trust are stated at fair value, which for shares of Company stock held in the trust is defined as the composite closing price of the stock on the New York Stock Exchange. Guaranteed investment contracts and synthetic investment contracts are valued at contract value. The fair value for all other investments are determined daily by the trustee on a per share basis using security prices quoted on national exchanges, and amortized cost in the case of any short-term and money market securities held. Participant notes receivable are valued at cost, which approximates fair value. 9 13 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Notes to Financial Statements, Continued (2), CONTINUED Security transactions received prior to 4:00 p.m. Eastern time by Fidelity are recognized on that business day. Transactions received after 4:00 p.m. Eastern time are valued as of the next business day. Interest income is recorded on the accrual basis and dividend income is recorded on the ex-dividend date. Net appreciation (depreciation) in the fair value of investments includes both realized and unrealized gains and losses. The Savings Plan Trust's investments in guaranteed and synthetic investment contracts are valued at contract value which approximates fair value. Contract value represents contributions made under the contract plus interest at the contract rate. The crediting interest rate is variable for the synthetic contracts and is reset quarterly based upon the fair value of the underlying securities. The crediting interest rate is fixed for guaranteed contracts. The average yield for the year ended December 31, 1997 is 6.67% and the crediting interest rate as of December 31, 1997 is 6.15% for these investment contracts. (c) PAYMENT OF BENEFITS Benefits are recorded when paid. (3) FUNDING POLICY The Company's funding policy is to make contributions to the Plan in accordance with the manner described in note 1. (4) PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA. In the event of Plan termination, participants will become fully vested in their accounts. 10 14 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Notes to Financial Statements, Continued (5) INVESTMENTS Investments of the Plan are held in trust by Fidelity Management Trust Company. The Plans participating in the Savings Plan Trust are The Gillette Company Employees' Savings Plan and The Gillette Company Savings Plan for Arrow Park Employees. Trust income is allocated ratably between the plans in accordance with the assets of each Plan invested in the trust. The net assets of the Savings Plan Trust at December 31, 1997 and 1996 are as follows:
1997 1996 ---- ---- Investments, at fair value: Marketable securities: Gillette common stock $1,551,947,454 1,306,814,500 Registered investment companies: Fidelity Intermediate Bond Fund -- 9,126,760 Fidelity Short-Term Investment Fund 23,695,057 31,916,887 Fidelity Retirement Government Money Market Portfolio 10,344,002 5,913,935 Fidelity Magellan Fund 46,585,401 34,287,295 Fidelity Balanced Fund -- 16,287,310 Fidelity U.S. Equity Index Portfolio 91,919,213 63,606,106 Fidelity Growth Company Fund 41,787,957 35,235,504 Fidelity Emerging Markets Fund 1,220,995 -- Fidelity Diversified International Fund 6,256,456 -- Fidelity Growth & Income Fund 21,222,508 -- INVESCO Total Return Fund 24,955,015 -- Fidelity U.S. Bond Index Fund 10,760,825 -- Investment contracts 312,826,658 260,086,270 Participant loans 29,104,490 26,347,534 -------------- ------------- Total investments and net assets $2,172,626,031 1,789,622,101 ============== ============= Assets allocated to The Gillette Company Employees' Savings Plan $2,163,135,513 1,782,593,392 Assets allocated to The Gillette Company Savings Plan for Arrow Park Employees $ 9,490,518 7,028,709 ============== =============
11 15 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Notes to Financial Statements, Continued (5), CONTINUED The statements of change in net assets of the Savings Plan Trust for the years ended December 31, 1997 and 1996 are as follows:
1997 1996 ---- ---- Employee contributions $ 47,855,615 41,325,185 Employer contributions 17,683,710 16,121,454 Investment income: Net appreciation (depreciation) on fair value of investments: Gillette common stock 368,245,796 431,024,386 Fidelity Intermediate Bond Fund (89,828) (317,625) Fidelity Magellan Fund 5,830,143 (2,198,991) Fidelity Balanced Fund 1,100,411 567,308 Fidelity U.S. Equity Index Portfolio 19,620,590 9,906,298 Fidelity Growth Company Fund 2,204,172 2,726,460 Fidelity Emerging Markets Fund (881,794) -- Fidelity Diversified International Fund 246,019 -- Fidelity Growth & Income Fund 2,048,113 -- INVESCO Total Return Fund 2,287,046 -- Fidelity U.S. Bond Index Fund 315,599 -- Dividends 24,656,455 22,259,897 Interest 22,065,612 20,569,869 -------------- ------------- Net investment income 447,648,334 484,537,602 Transferred from prior trustee -- 10,698,627 -------------- ------------- Total additions 513,187,659 552,682,868 Benefit payments (130,062,739) (75,766,746) Forfeitures (120,990) (73,104) -------------- ------------- Total deductions (130,183,729) (75,839,850) -------------- ------------- Net increase 383,003,930 476,843,018 Net assets: Beginning of year 1,789,622,101 1,312,779,083 -------------- ------------- End of year $2,172,626,031 1,789,622,101 ============== =============
12 16 THE GILLETTE COMPANY SAVINGS PLAN FOR ARROW PARK EMPLOYEES Notes to Financial Statements, Continued (6) ADMINISTRATIVE EXPENSES The Company bears administrative costs of maintaining the Plan and investment expenses associated with the Fixed Income Fund and The Gillette Company Stock Fund. Investment expenses associated with the Fidelity funds offered as investment options under the Plan are deducted from the assets of each of those funds. (7) INCOME TAXES A favorable tax determination letter was received from the Internal Revenue Service on April 18, 1996 stating that the existing Plan and its underlying trust qualified under section 401(a) of the Internal Revenue Code of 1986 (the "Code") as a profit sharing plan, and is exempt from federal income taxes. Further, the features of the Plan relating to tax deferred savings qualified under section 401(k) of the Code. In the opinion of the Plan administrator and the Plan's tax advisor, the Plan and its underlying trust have operated within the terms of the Plan document and remain qualified under the applicable provisions of the Internal Revenue Code. (8) PLAN TRANSFERS On September 18, 1995, Parker Pen USA Limited's Board of Directors approved a change in Trustees of the Plan from Marshall & Ilslay Bank and Trust Company to Fidelity Management Trust Company effective January 1, 1996. During 1995, the account balances of certain participants ($606,707) were transferred into The Gillette Company Employees' Savings Plan ("Gillette Plan"). The account balances of all remaining non-bargaining unit participants of the Plan totaling $3,806,039 were transferred to The Gillette Plan on January 2, 1996 along with their payment reserve account balances which totaled $141,374. These participants are now participating in the Gillette Plan. Effective January 1, 1996, The Gillette Company assumed sponsorship and administration of the Plan which was redesigned to replicate the investment options, including Gillette common stock, and administrative features of the Gillette Plan. (9) PLAN AMENDMENT Effective July 1, 1997, the name of the Plan changed from the "Parker Plan 401(k) Plan" to "The Gillette Company Savings Plan for Arrow Park Employees." 13 EX-23.2 2 CONSENT OF KPMG PEAT MARWICK LLP 1 Exhibit 23.2 CONSENT OF INDEPENDENT AUDITORS The Advisory Committee The Gillette Company Savings Plan for Arrowpark Employees: We consent to the incorporation by reference in registration statement No. 33-63707 on Form S-8 of The Gillette Company Savings Plan for Arrowpark Employees of our report dated May 15, 1998, relating to the statements of net assets available for plan benefits of The Gillette Company Savings Plan for Arrowpark Employees as of December 31, 1997 and 1996, and the related statements of changes in net assets available for plan benefits for each of the years in the two -year period ended December 31, 1997, which report appears in the December 31, 1997 annual report on Form 11-K of The Gillette Company Savings Plan for Arrowpark Employees. /s/ KPMG Peat Marwick LLP Boston, Massachusetts June 24, 1997 -----END PRIVACY-ENHANCED MESSAGE-----