-----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, Duw10GcIu1/WkrxaJ+cbiOga9+gm2SNU8AANw4m/d2rPGysJLxxHGEiW/oxmAISa C+mCuH2mZI5LA4MGtF8xAg== 0000080424-03-000046.txt : 20030625 0000080424-03-000046.hdr.sgml : 20030625 20030625150630 ACCESSION NUMBER: 0000080424-03-000046 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030625 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: 1934 Act SEC FILE NUMBER: 001-00434 FILM NUMBER: 03756561 BUSINESS ADDRESS: STREET 1: ONE PROCTER & GAMBLE PLZ CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5139831100 11-K 1 pgcom02.txt P&G COMMERICAL COMPANY EMPLOYEES' SAVINGS PLAN 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 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002, 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 Procter & Gamble Commercial Company Employees' Savings Plan, 355 Tetuan Street, Old San Juan, P.O. Box 363187, San Juan, Puerto Rico 00936-3187 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 PROCTER & GAMBLE COMMERCIAL COMPANY EMPLOYEES' SAVINGS PLAN INDEPENDENT AUDITORS' REPORT FINANCIAL STATEMENTS As of December 31, 2002 and 2001 and for the Year Ended December 31, 2002 SUPPLEMENTAL SCHEDULES Year Ended December 31, 2002 THE PROCTER & GAMBLE COMMERCIAL COMPANY EMPLOYEES' SAVINGS PLAN TABLE OF CONTENTS - -------------------------------------------------------------------------------- PAGE Independent Auditors' Report 1 Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 2002 and 2001 2 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2002 3 Notes to Financial Statements 4-7 Supplemental Schedules: Schedule I - Schedule of Assets Held at December 31, 2002 (Schedule H, Line 4(i) on Form 5500) 8 Schedule II - Schedule of Reportable Transactions for the Year Ended December 31, 2002 (Schedule H, Line 4(j) on Form 5500) 9 Schedule III - Nonexempt Transactions for the Year Ended December 31, 2002 (Schedule H, Line 4(a) on Form 5500) 10 INDEPENDENT AUDITORS' REPORT To the Participants and Retirement Committee of The Procter & Gamble Commercial Company Employees' Savings Plan: We have audited the accompanying statements of net assets available for benefits of The Procter & Gamble Commercial Company Employees' Savings Plan (the "Plan") as of December 31, 2002 and 2001, and the related statement of changes in net assets available for benefits for the year ended December 31, 2002. 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 auditing standards generally accepted in the United States of America. 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 December 31, 2002 and 2001, and the changes in net assets available for benefits for the year ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules listed in the Table of Contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures applied in our audit of the basic 2002 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /S/ DELOITTE & TOUCHE LLP - ------------------------- DELOITTE & TOUCHE LLP San Juan, Puerto Rico June 11, 2003 Stamp No. 1887637 affixed to original.
THE PROCTER & GAMBLE COMMERCIAL COMPANY EMPLOYEES' SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2002 AND 2001 - --------------------------------------------------------------------------------------------- ASSETS 2002 2001 - ------ ---- ---- INVESTMENTS, At fair value $7,714,738 $5,338,302 ---------- ---------- RECEIVABLES: Participants' contributions 30,225 72,483 Employers' contributions 8,649 17,587 ---------- ---------- Total receivables 38,874 90,070 ---------- ---------- Total assets 7,753,612 5,428,372 LIABILITIES - Excess contribution to be recognized next year 127,479 - ----------- ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $7,626,133 $5,428,372 ========== ========== See notes to financial statements.
THE PROCTER & GAMBLE COMMERCIAL COMPANY EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 2002 - ---------------------------------------------------------------------------- ADDITIONS: Contributions: Participants $ 959,990 Employer 298,190 ----------- Total contributions 1,258,180 ----------- Investment loss: Net depreciation in fair value of investments (288,593) Interest 27,864 Dividends 129,957 ----------- Total investment loss, net (130,772) Transfers in from predecessor qualified plans 1,372,118 ----------- Total additions 2,499,526 ----------- DEDUCTIONS: Benefits paid to participants 289,009 Other expenses 12,756 ----------- Total deductions 301,765 ----------- INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 2,197,761 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 5,428,372 ----------- End of year $ 7,626,133 =========== See notes to financial statements. THE PROCTER & GAMBLE COMMERCIAL COMPANY EMPLOYEES' SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2002 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The following description of The Procter & Gamble Commercial Company (the "Company") Employees' Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. a. GENERAL - The Plan is a defined contribution plan covering all full-time employees of the Company and of two affiliated companies, Olay Company, Inc. and Procter & Gamble Pharmaceuticals Puerto Rico, Inc. (the "Companies") who are residents of Puerto Rico, have completed one year of service and are age twenty-one or older. The Plan was established effective November 1, 1993 and is sponsored by the Companies. In 2002, the assets and liabilities of the Olay Company, Inc. Employees' Savings Plan and the Procter & Gamble Pharmaceuticals CODA Profit Sharing Plan, both qualified plans, were transferred into the Plan (see Note 3). This Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). b. CONTRIBUTIONS - Each year, participants may contribute up to 10 percent of pretax annual compensation, as defined in the Plan, not exceeding the maximum deferral amount specified by Puerto Rico law. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers six mutual funds and a fund, which invests in common stock of the Company, as investment options for participants. The Companies contribute 40 percent of the first 5 percent of base compensation that a participant contributes to the Plan. The matching Companies' contributions are invested directly in The Procter & Gamble Company common stock. Contributions are subject to certain limitations. c. PARTICIPANT ACCOUNTS - Each participant's account is credited with the participant's contribution and allocations of (A) the Companies' contributions and, (B) Plan earnings. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. d. VESTING - Participants are vested immediately in their contributions plus actual earnings thereon. The Companies' contributions portion of their accounts plus actual earnings thereon is 100 percent vested upon the occurrence of any of the following events: completion of three years of credited service; attaining age 65; total disability while employed by the Companies or death while employed by the Companies. e. PAYMENT OF BENEFITS - On termination of service, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution. f. LOANS TO PARTICIPANTS - Loans to participants are not permitted. g. FORFEITED ACCOUNTS - At December 31, 2002, forfeited nonvested accounts totaled $40,753. These accounts will be used to reduce future Companies contributions to the Plan. h. PLAN TERMINATION - Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue their contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their employer contributions. 2. SIGNIFICANT ACCOUNTING POLICIES a. BASIS OF ACCOUNTING - The financial statements of the Plan are prepared under the accrual method of accounting. b. USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan administrator to make estimates and assumptions that affect the participant account balances and the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates. The Plan utilizes various investment instruments. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for plan benefits. c. INVESTMENTS VALUATION AND INCOME RECOGNITION - The Plan's investments are stated at fair value. Quoted market prices are used to value investments. Shares of mutual funds are valued at the net asset value of shares held by the Plan at year-end. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. d. PAYMENT OF BENEFITS - Benefits are recorded when paid. e. PLAN EXPENSES - All expenses incurred in administering the Plan may be paid out of the invested assets unless paid by the Company. 3. TRANSFERS IN FROM PREDECESSOR QUALIFIED PLANS In 2002, the assets and liabilities of the Olay Company, Inc. Employees' Savings Plan and the Procter & Gamble Pharmaceuticals CODA Profit Sharing Plan, both qualified plans, were transferred into the Plan. Net assets transferred amounted to $1,372,118.
4. INVESTMENTS The following presents investments as of December 31, 2002 and 2001 that represent five percent or more of the Plan's net assets: 2002 2001 ---- ---- The Procter & Gamble Company - common stock; 51,338.41and 37,688.92 shares, respectively $ 4,412,023 $ 2,982,324 JP Morgan Disciplined Equity Institutional Fund - 125,902.18 units 1,328,268 JP Morgan Diversified Institutional Fund - 87,722.30 units 943,892 JP Morgan Prime Money Market Institutional Fund 328,309.68 units 328,310 JP Morgan Bond Ultra Fund- 28,062.84 units 285,680 Fidelity Advisor Growth Opportunities Fund - Class T; 36,032.48 units 1,044,238 Fidelity Advisor Balanced Fund - Class T; 40,758.96 units 635,032
During 2002, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows: Common stock $ 348,601 Mutual funds (637,194) --------- Total $(288,593) ========= The dividend and interest income of the Plan for the year ended December 31, 2002 were as follows: Dividend income: Common stock $ 76,972 Mutual funds 52,985 --------- Total $ 129,957 ========= Interest income- interest-bearing deposit $ 27,864 ========= 5. INVESTMENT IN THE J.M. SMUCKER COMPANY COMMON STOCK In May of 2002, the Jif peanut butter and Crisco shortening brands were spun-off to the Company's shareholders and subsequently merged into The J.M. Smucker Company ("Smucker"). As a result of the spin-off, holders of The Procter & Gamble Company ("P&G") common stock received one share of the Smucker stock for each fifty shares of P&G common stock. The cost basis of P&G common stock owned by the Plan at the time of the Smucker spin-off was allocated between the P&G common stock held and the Smucker common stock received. The Plan is not permitted to purchase additional shares of the Smucker common stock. At December 31, 2002, the Plan's investment in Smucker common stock consisted of 924.59 shares with a fair value of $36,808. 6. NONPARTICIPANT-DIRECTED INVESTMENT Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investment (the common stock of The Procter & Gamble Company) is as follows:
2002 2001 ---- ---- Net assets at December 31, 2002 and 2001 - Common stock $ 4,412,023 $ 2,982,324 =========== =========== Changes in net assets for the year ended December 31, 2002: Contributions $ 665,791 Transfers in from predecessor qualified plans 708,384 Net appreciation 311,793 Dividends 76,972 Benefits paid to participants (97,750) Net transfers to participant directed investments (148,246) Other disbursements (87,245) ----------- Net increase in net assets $ 1,429,699 ===========
7. RELATED-PARTY TRANSACTIONS Certain Plan investments are shares of mutual funds managed by J.P. Morgan and American Century and an interest bearing deposit with JP Morgan Chase Bank. J.P. Morgan/American Century Retirement Plan Services, an area of American Century Services Corporation, performs record keeping and administrative services to the Plan and, therefore, these transactions qualify as party-in-interest transactions. 8. INCOME TAXES The Plan is exempt from Puerto Rico income taxes under the provisions of the Puerto Rico Internal Revenue Code of 1994 ("PRIRC"), as amended. The Plan is not qualified under Section 401(a) of the Internal Revenue Code, but it is exempt from United States taxation under Section 1022 of the Employee Retirement Income Security Act of 1974. The Plan is required to operate in conformity with the PRIRC to maintain its qualification. The Plan participants are not taxed on the income and contributions made to their accounts until such time as the participant or the participant's beneficiary receives distributions from the Plan. 9. CLASS ACTION LAWSUIT During March of 2000, a class action lawsuit was filed against The Procter & Gamble Company by shareholders of common stock. The class was certified on October 29, 2001 by the United States District Court for the Southern District of Ohio, Western Division (the "Court"), and a settlement of $49,000,000 has been approved. The Plan joined the class plaintiffs on March 25, 2002. Once the allocation of the setlement is determined and approved by the Court, the Plan will receive its portion of the settlement to allocate to participant accounts. ******
SCHEDULE I THE PROCTER & GAMBLE COMMERCIAL COMPANY EMPLOYEES' SAVINGS PLAN SCHEDULE OF ASSETS HELD AT DECEMBER 31, 2002 (FORM 5500, SCHEDULE H, LINE 4i) - ------------------------------------------------------------------------------------------------------------------------------------ Description of Shares/Units/ Identity of Issue Investment Par Value Cost Fair Value - ----------------- -------------- ------------- ---- ---------- The Procter & Gamble Company Common stock 51,338.41 $ 4,118,159 $ 4,412,023 The J.P. Smucker Company Common stock 924.59 26,697 36,808 JP Morgan Disciplined Equity Institutional Fund * Mutual fund 125,902.18 N/A 1,328,268 JP Morgan Diversified Institutional Fund * Mutual fund 87,722.30 N/A 943,892 JP Morgan Prime Money Market Institutional Fund * Mutual fund 328,309.68 N/A 328,310 JP Morgan Bond Ultra Fund * Mutual fund 28,062.84 N/A 285,680 American Century Heritage Institutional Fund * Mutual fund 29,200.56 N/A 267,477 Putnam International Growth Fund * Mutual fund 5,726.83 N/A 95,346 JP Morgan Chase Bank Interest-bearing 6,934.00 16,934 16,934 deposit ----------- Total $ 7,714,738 =========== *Registered Investment Company. N/A = Not applicable.
SCHEDULE II THE PROCTER & GAMBLE COMMERCIAL COMPANY EMPLOYEES' SAVINGS PLAN SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 2002 (FORM 5500, SCHEDULE H, LINE 4j) - -------------------------------------------------------------------------------------------- SINGLE TRANSACTIONS - None. Current SERIES OF TRANSACTIONS: Value of Asset on Net Purchase Sales Cost of Transaction Gain Description of Asset Amount Amount Asset Date on Sale - -------------------- -------- ------ ------- ----------- ------- The Procter & Gamble Company - common stock $ 769,249 $ 348,485 $ 312,795 $ 348,485 $ 35,690
SCHEDULE III THE PROCTER & GAMBLE COMMERCIAL COMPANY EMPLOYEES' SAVINGS PLAN SCHEDULE OF NONEXEMPT TRANSACTIONS YEAR ENDED DECEMBER 31, 2002 (FORM 5500, SCHEDULE H, ITEM 4a) - ---------------------------------------------------------------------------------------------------------------------- Relationship Description of Cost of Identity of Party Involved to Plan Transaction Asset - -------------------------- ------------ -------------- ------- The Procter & Gamble Plan Sponsor Certain participant contributions Commercial Company for the year ended December 31, 2002 were remitted to the Plan after the maximum time period described in 29 CFR 2510.3-102 $ 161,569 Olay Company, Inc. Plan Sponsor Certain participant contributions for the year ended December 31, 2002 were remitted to the Plan after the maximum time period described in 29 CFR 2510.3-102 81,422 Procter & Gamble Pharmaceuticals Plan Sponsor Certain participant contributions Puerto Rico, Inc. for the year ended December 31, 2002 were remitted to the Plan after the maximum time period described in 29 CFR 2510.3-102 24,780 --------- Total $ 267,771 =========
THE PLAN. 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 thereunto duly authorized. THE PROCTER & GAMBLE COMMERCIAL COMPANY EMPLOYEES' SAVINGS PLAN DATE June 25, 2003 /S/ Thomas J. Mess -------------------------------- Thomas J. Mess Secretary for Trustees EXHIBIT INDEX Exhibit No. Page No. 23 Consent of Deloitte & Touche EX-23 3 ex23-02.txt PGCOMMERCIAL-EX23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-50273 of The Procter & Gamble Company on Form S-8 of our report dated June 11, 2003 appearing in this Annual Report on Form 11-K of The Procter & Gamble Commercial Company Employees' Savings Plan for the year ended December 31, 2002. /S/ DELOITTE & TOUCHE LLP - ------------------------- DELOITTE & TOUCHE LLP San Juan, Puerto Rico June 23, 2003 Stamp No. 1887638 affixed to original -----END PRIVACY-ENHANCED MESSAGE-----