-----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, HO64tQhbfOLSP1tuhSkqCXlOPugkrqJR71bPWwRdhh75nh5KCupzbZX6WFaIfjNW GbCBhZ1iIIIY3z/bZkC7dQ== 0000080424-98-000047.txt : 19981221 0000080424-98-000047.hdr.sgml : 19981221 ACCESSION NUMBER: 0000080424-98-000047 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19981218 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROCTER & GAMBLE CO CENTRAL INDEX KEY: 0000080424 STANDARD INDUSTRIAL CLASSIFICATION: SOAP, DETERGENT, CLEANING PREPARATIONS, PERFUMES, COSMETICS [2840] IRS NUMBER: 310411980 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-00434 FILM NUMBER: 98771601 BUSINESS ADDRESS: STREET 1: ONE PROCTER & GAMBLE PLZ CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5139831100 11-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 11-K \X\ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the fiscal year ended June 30, 1998, or \ \ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the transition period from ________________ to ______________________ Commission file number 001-00434 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: The Profit Sharing Retirement Plan of The Procter & Gamble Commercial Company, The Procter & Gamble Company, Two Procter & Gamble Plaza, Cincinnati, Ohio 45202. B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: The Procter & Gamble Company, One Procter & Gamble Plaza, Cincinnati, Ohio 45202. REQUIRED INFORMATION Item 4. Plan Financial Statements and Schedules Prepared in Accordance With the Financial Reporting Requirements of ERISA THE PROFIT SHARING RETIREMENT PLAN OF THE PROCTER & GAMBLE COMMERCIAL COMPANY Financial Statements for the Years Ended June 30, 1998 and 1997 and Independent Auditor's Report THE PROFIT SHARING RETIREMENT PLAN OF THE PROCTER & GAMBLE COMMERCIAL COMPANY TABLE OF CONTENTS - -------------------------------------------------------------------------------- Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits, June 30, 1998 and 1997 2 Statements of Changes in Net Assets Available for Benefits for the Years Ended June 30, 1998 and 1997 3 Notes to Financial Statements for the Years Ended June 30, 1998 and 1997 4 SUPPLEMENTAL SCHEDULES OMITTED - The following schedules were omitted because of the absence of conditions under which they are required or due to their inclusion in information filed by The Procter & Gamble Master Savings Trust in which this plan participates: Assets Held for Investment Reportable Transactions for the Year Ended June 30, 1998 Assets Acquired and Disposed of Within Plan Year Party-in-Interest Transactions Obligations in Default Leases in Default INDEPENDENT AUDITORS' REPORT To The Procter & Gamble Master Savings Plan Committee: We have audited the accompanying statements of net assets available for benefits of The Profit Sharing Retirement Plan of The Procter & Gamble Commercial Company as of June 30, 1998 and 1997, and the related statements of changes in net assets available for 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, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of June 30, 1998 and 1997 and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. /S/DELOITTE & TOUCHE LLP November 10, 1998 THE PROFIT SHARING RETIREMENT PLAN OF THE PROCTER & GAMBLE COMMERCIAL COMPANY STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, JUNE 30, 1998 AND 1997 - ------------------------------------------------------------------------------- 1998 1997 ASSETS: Investment in The Procter & Gamble Master Savings Trust, at fair value $34,552,463 $29,307,422 Contributions receivable 2,188,316 1,619,503 Accrued income 1,308 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $36,740,779 $30,928,233 =========== =========== See notes to financial statements. THE PROFIT SHARING RETIREMENT PLAN OF THE PROCTER & GAMBLE COMMERCIAL COMPANY STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED JUNE 30, 1998 AND 1997 - ------------------------------------------------------------------------------- 1998 1997 ADDITIONS: Equity in net earnings of The Procter & Gamble Master Savings Trust $ 6,705,963 $ 7,592,450 Company contributions (net of forfeitures) 2,324,548 1,690,227 Other 7,310 ----------- ----------- Total additions 9,030,511 9,289,987 DEDUCTIONS - Distributions to participants 3,217,965 3,069,547 ----------- ----------- NET INCREASE 5,812,546 6,220,440 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 30,928,233 24,707,793 ----------- ----------- End of year $36,740,779 $30,928,233 =========== =========== See notes to financial statements. THE PROFIT SHARING RETIREMENT PLAN OF THE PROCTER & GAMBLE COMMERCIAL COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 1998 AND 1997 - -------------------------------------------------------------------------------- 1. PLAN DESCRIPTION The following brief description of The Profit Sharing Retirement Plan of The Procter & Gamble Commercial Company (Plan) is provided for general information purposes only. Participants should refer to the Plan document for more complete information. GENERAL - The Plan is funded through contributions by The Procter & Gamble Commercial Company, the Procter & Gamble Pharmaceuticals, Inc. and Olay Company, Inc. (hereinafter collectively referred to as the "Plan Sponsors"). The Plan Sponsors are wholly-owned subsidiaries of The Procter & Gamble Company (Company). Substantially all employees of the Plan Sponsors, who are not active participants in another Company sponsored plan, are eligible to participate in the Plan upon completion of one year of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). All Plan assets are held in The Procter & Gamble Master Savings Trust (Master Trust) at June 30, 1998 and 1997, along with the assets of other Company sponsored defined contribution plans (see Note 4). Each of the Plans has a proportionate and undivided ownership interest in the Master Trust assets. CONTRIBUTIONS AND VESTING - The Plan Sponsors make contributions to the Plan each year based upon the amount of compensation and number of credit service years of each Plan participant, as defined by the Plan agreement, up to specified limitations. The Plan Sponsors' contributions are calculated by applying the relevant participation percentage to the total compensation, both as defined by the Plan. Participants are not permitted to make contributions to the Plan. The following schedule details the participation percentages by years of service. PARTICIPATION YEARS OF SERVICE PERCENTAGE 1-3 8% 4-6 9% 7-8 10% 9-10 11% 11-12 12% 13-14 13% 15 or more 14% Subsequent to July 1, 1989, participants are vested 100% upon completion of the five years of service. Participants are also 100% vested in their accounts upon termination for disability, early or normal retirement, death and also upon attainment of 65 years of age, regardless of years of service. DISTRIBUTIONS - Distributions of Plan benefits may be made in a lump sum or in installment payments over a period not to exceed fifteen years after the date of death, termination, retirement, or disability. Distributions payable to participants as of June 30, 1998 and 1997 are approximately $13,500 and $1,156,000, respectively. FORFEITURES - Participants who terminate service prior to vesting forfeit their account balance. If the participant is rehired prior to a five-year break in service, as defined by the Plan, the amount which was forfeited is restored to the participant's account. Forfeited amounts are used to reduce the Plan Sponsors' annual contribution. PARTICIPANT ACCOUNTS - As described in the Plan document, participants may allocate contributions made to their account in one or all of the following investment options offered by the Master Trust (Note 4): RESERVE FUND - The prospectus states that this fund invests in short to medium length maturity, interest-bearing instruments. COMPANY STOCK FUND - The prospectus states that this fund invests in shares of The Procter & Gamble Company common stock. MANAGED BOND FUND - The prospectus states that this fund invests in a diversified portfolio of publicly and privately traded corporate, government, international and mortgage backed bonds. MANAGEMENT LARGE COMPANY FUND - The prospectus states that this fund invests in equity securities of approximately 300 domestic, large company stocks. DIVERSIFIED FUND - The prospectus states that this fund invests in both equity and fixed-income securities. SMALL COMPANY FUND - The prospectus states that this fund invests in a portfolio of equity securities issued by small companies. INTERNATIONAL EQUITY FUND - The prospectus states that this fund invests in a diversified portfolio of equity securities of foreign corporations. The activity and balances in the funds are summarized as follows for the years ended June 30, 1998 and 1997:
MASTER MASTER MASTER TRUST MASTER MASTER MASTER TRUST TRUST MANAGEMENT MASTER TRUST TRUST TRUST COMPANY MANAGED LARGE TRUST SMALL INTERNATIONAL RESERVE STOCK BOND COMPANY DIVERSIFIED COMPANY EQUITY FUND FUND FUND FUND FUND FUND FUND TOTAL Net assets available for benefits, June 30, 1996 $3,089,013 $ 9,462,863 $188,495 $ 963,868 $11,003,554 $ - $ - $24,707,793 Equity in net earnings of The Procter & Gamble Master Savings Trust 173,424 4,984,795 16,517 327,533 2,082,326 2,900 4,955 7,592,450 Company contributions (Net) 228,214 1,165,994 11,458 266,277 (26,433) 20,718 23,999 1,690,227 Distributions to participants (117,054) (1,004,438) (15,221) (39,359) (1,893,475) (3,069,547) Interfund transfers (20,585) 8,506 (30,386) 7,032 (32,021) 29,019 38,435 Other 3,242 4,068 7,310 ---------- ----------- -------- ---------- ----------- ------- -------- ----------- Net assets available for benefits, June 30, 1997 3,353,012 14,620,962 170,863 1,525,351 11,138,019 52,637 67,389 30,928,233 Equity in net earnings of The Procter & Gamble Master Savings Trust 179,616 4,143,118 15,531 506,440 1,851,483 8,011 1,764 6,705,963 Company contributions (Net) 138,090 1,529,676 13,814 280,150 271,222 43,538 48,058 2,324,548 Distributions to participants (397,723) (1,098,671) (21,413) (66,040) (1,634,118) (3,217,965) Interfund transfers 226,172 (204,456) 3,593 327,886 (340,200) (14,535) 1,540 ---------- ----------- -------- ---------- ----------- ------- -------- ----------- Net assets available for benefits, June 30, 1998 $3,499,167 $18,990,629 $182,388 $2,573,787 $11,286,406 $89,651 $118,751 $36,740,779 ========== =========== ======== ========== =========== ======= ======== ===========
PLAN TERMINATION - Although it has not expressed any intent to do so, the Plan Sponsors have the right under the Plan to discontinue their contributions at any time and to terminate the Plan subject to the provisions of ERISA. If the Plan is terminated, participants will become fully vested in their accounts and the net assets of the Plan will be distributed in an order of priority determined in accordance with ERISA and its applicable regulations and the Plan document. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING - The accompanying financial statements are prepared on the accrual basis of accounting and the Plan's net assets and transactions are recorded at fair value. The Plan's investment in The Procter & Gamble Company Common Stock is valued at the closing price on established security exchanges. The Plan's investment funds (funds) are valued by the fund manager, JP Morgan Investment Management, Inc., based upon the fair value of the funds' underlying investments. Income from investments is recognized when earned and is allocated to each plan participating in The Procter & Gamble Master Savings Trust (Master Trust) and each participant's account by PNC Bank, Ohio, N.A., (PNC Bank), the trustee of the Plan. EXPENSES OF THE PLAN - All expenses of the Plan are paid by the Plan Sponsors. USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. INCOME TAX STATUS The Plan is exempt from Puerto Rico income taxes under the provisions of Section 165(a) of the Puerto Rico Income Tax Act of 1954, as amended. The Plan is also a qualified employees' trust under Section 401(a) of the Internal Revenue Code (IRC) and, as such, is exempt from federal income taxes under Section 501(a). The Plan has been amended since receiving the latest determination letters. However, the plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Puerto Rico Income Tax Act of 1954 and the IRC. Therefore, they believe that the Plan was qualified and tax-exempt as of June 30, 1998 and 1997. 4. INTEREST IN MASTER TRUST Effective January 1, 1993, the Company formed the Master Trust in accordance with a master trust agreement with PNC Bank. Use of a Master Trust permits the commingling of various Company-sponsored benefit plans for investment and administrative purposes. Although assets are commingled in the Master Trust, PNC Bank maintains records for the purpose of allocating contributions and changes in net assets of the Master Trust to both participating plans and individual participant accounts based upon each plan's or participant's proportionate interest in the Master Trust. The following represents the 1998 and 1997 audited information regarding the net assets and investment income of the Master Trust:
Assets of the Master Trust at June 30, 1998 are summarized as follows: MANAGEMENT INTER- COMPANY MANAGED LARGE SMALL NATIONAL RESERVE STOCK BOND DIVERSIFIED COMPANY COMPANY EQUITY FUND FUND FUND FUND FUND FUND FUND TOTAL Investments, at fair value $27,121,329 $86,176,208 $5,970,562 $35,527,095 $69,868,657 $5,012,476 $2,873,435 $232,549,762 Accrued interest and dividends 298 820 4 12 29 4 1 1,168 ----------- ----------- ---------- ----------- ----------- ---------- ---------- ------------ Total $27,121,627 $86,177,028 $5,970,566 $35,527,107 $69,868,686 $5,012,480 $2,873,436 $232,550,930 =========== =========== ========== =========== =========== ========== ========== ============ Plan's investment in Master Trust $ 3,509,966 $17,445,135 $ 171,587 $11,016,844 $ 2,291,613 $ 46,113 $ 71,205 $ 34,552,463 =========== =========== ========== =========== =========== ========== ========== ============ Plan's percentage ownership in Master Trust 13% 20% 3% 31% 3% 1% 2% 15% =========== =========== ========== =========== =========== ========== ========== ============ Investments held by the Master Trust at June 30, 1998 are summarized as follows: FAIR VALUE The Procter & Gamble Company common stock $85,861,208 $ 85,861,208 Mutual Funds $27,057,076 $5,970,500 $35,526,977 $69,860,815 $5,012,399 $2,873,382 146,301,149 Short-term investments 64,253 315,000 62 118 7,842 77 53 387,405 ----------- ----------- ---------- ----------- ----------- ---------- ---------- ------------ Total investments at fair value $27,121,329 $86,176,208 $5,970,562 $35,527,095 $69,868,657 $5,012,476 $2,873,435 $232,549,762 =========== =========== ========== =========== =========== ========== ========== ============ Investment income from the Master Trust for the Year Ended June 30, 1998 is summarized as follows: Net appreciation in fair value of investments $ 1,424,219 $19,077,392 $ 545,238 $ 5,916,354 $16,882,522 $ 716,290 $ 142,033 $ 44,704,048 Dividends 935,183 935,183 Interest 8,732 42,810 8 16 14 10 7 51,597 ----------- ----------- ---------- ----------- ----------- ---------- ---------- ------------ Total $ 1,432,951 $20,055,385 $ 545,246 $ 5,916,370 $16,882,536 $ 716,300 $ 142,040 $ 45,690,828 =========== =========== ========== =========== =========== ========== ========== ============ Plan's equity in net earnings of Master Trust $ 179,616 $ 4,143,118 $ 15,531 $ 1,851,483 $ 506,440 $ 8,011 $ 1,764 $ 6,705,963 =========== =========== ========== =========== =========== ========== ========== ============
Assets of the Master Trust at June 30, 1997 are summarized as follows: MANAGEMENT INTER- COMPANY COLLECTIVE MANAGED LARGE SMALL NATIONAL RESERVE STOCK INCOME BOND DIVERSIFIED COMPANY COMPANY EQUITY FUND FUND FUND FUND FUND FUND FUND FUND TOTAL Investments, at fair value $29,617,561 $62,086,043 $6,142,246 $34,228,224 $56,870,143 $3,633,718 $2,646,225 $195,224,160 Accrued interest and dividends 307 1,864 10 11 315 2 2,509 ----------- ----------- ----------- ---------- ----------- ----------- ---------- ---------- ------------ Total $29,617,868 $62,087,907 - $6,142,256 $34,228,235 $56,870,458 $3,633,718 $2,646,227 $195,226,669 =========== =========== =========== ========== =========== =========== ========== ========== ============ Plan's investment in Master Trust $ 3,122,864 $13,535,294 - $ 159,218 $11,155,651 $ 1,259,086 $ 31,919 $ 43,390 $ 29,307,422 =========== =========== =========== ========== =========== =========== ========== ========== ============ Plan's percentage ownership in Master Trust 11% 22% - 3% 33% 2% 1% 2% 15% =========== =========== =========== ========== =========== =========== ========== ========== ============ Investments held by the Master Trust at June 30, 1997 are summarized as follows: FAIR VALUE The Procter & Gamble Company common stock $61,848,290 $ 61,848,290 Mutual Funds $29,551,631 $6,142,167 $34,228,147 $56,778,476 $3,633,668 $2,646,159 132,980,248 Short-term investments 65,930 237,753 79 77 91,667 50 66 395,622 ----------- ----------- ----------- ---------- ----------- ----------- ---------- ---------- ------------ Total investments at fair value $29,617,561 $62,086,043 - $6,142,246 $34,228,224 $56,870,143 $3,633,718 $2,646,225 $195,224,160 =========== =========== =========== ========== =========== =========== ========== ========== ============ Investment income from the Master Trust for the Year Ended June 30, 1997 is summarized as follows: Net appreciation in fair value of investments $ 1,780,575 $20,441,836 $17,160 $ 590,951 $ 6,104,650 $15,268,979 $ 502,955 $ 338,042 $ 45,045,148 Dividends 902,614 902,614 Interest 16,372 59,039 - 10 11 22,763 - 2 98,197 ----------- ----------- ----------- ---------- ----------- ----------- ---------- ---------- ------------ Total $ 1,796,947 $21,403,489 $17,160 $ 590,961 $ 6,104,661 $15,291,742 $ 502,955 $ 338,044 $ 46,045,959 =========== =========== =========== ========== =========== =========== ========== ========== ============ Plan's equity in net earnings of Master Trust $ 173,424 $ 4,984,795 - $ 16,517 $ 2,082,326 $ 327,533 $ 2,900 $ 4,955 $ 7,592,450 =========== =========== =========== ========== =========== =========== ========== ========== ============
* * * * * * PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE TRUSTEES (OR OTHER PERSONS WHO ADMINISTER THE EMPLOYEE BENEFIT PLAN) HAVE DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED HEREUNTO DULY AUTHORIZED. The Profit Sharing Retirement Plan of The Procter & Gamble Commercial Company /S/THOMAS J. MESS Date: December 18, 1998 --------------------------------------- Thomas J. Mess Member, Policy Committee EXHIBIT INDEX Exhibit No. Page No. 23 Consent of Deloitte & Touche EX-23 2 DELOITTE & TOUCHE - ---------- ------------------------------------------------------ DELOITTE & TOUCHE LLP Telephone: (513) 784-7100 250 East Fifth Street P.O. Box 5340 Cincinnati, Ohio 45201-5340 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in the Registration Statement No. 333-14381 of The Procter & Gamble Company on Form S-8 of our report dated November 10, 1998 appearing in this Annual Report on Form 11-K of the Profit Sharing Retirement Plan of The Procter & Gamble Commercial Company for the year ended June 30, 1998. /S/DELOITTE & TOUCHE LLP - -------------------------- Cincinnati, Ohio December 15, 1998 - --------------- DELOITTE TOUCHE TOHMATSU - --------------- -----END PRIVACY-ENHANCED MESSAGE-----