-----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, VD8Biw07WcMNovAYs6jB58eQFbi3JMncaon/AcVynj6ln7iNfj0Zm/TNIOYFo00+ 0GKe9XfE47SHuuxMxHdvKw== 0000080424-06-000088.txt : 20060629 0000080424-06-000088.hdr.sgml : 20060629 20060629133949 ACCESSION NUMBER: 0000080424-06-000088 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060629 DATE AS OF CHANGE: 20060629 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: 06932874 BUSINESS ADDRESS: STREET 1: ONE PROCTER & GAMBLE PLZ CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5139831100 11-K 1 subsav05.txt 11-K - P&G SUB SVGS PLAN 2005 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, 2005, or \ \ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 Subsidiaries Savings Plan, 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. Exhibits: 23 Consent of Deloitte & Touche LLP SIGNATURE 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 PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN /S/THOMAS J. MESS Date: June 29, 2006 ------------------------------------------ Thomas J. Mess Secretary for Trustees THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN Financial Statements as of and for the Years Ended December 31, 2005 and 2004, Supplemental Schedule as of December 31, 2005, and Report of Independent Registered Public Accounting Firm THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN TABLE OF CONTENTS - -------------------------------------------------------------------------------- PAGE REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits as of December 31, 2005 and 2004 2 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2005 and 2004 3 Notes to Financial Statements 4-9 SUPPLEMENTAL SCHEDULE-- Form 5500, Schedule H, Part IV, Line 4i--Schedule of Assets (Held at End of Year) as of December 31, 2005 11 NOTE: All other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To The Procter & Gamble Master Savings Plan Committee: We have audited the accompanying statements of net assets available for benefits of The Procter & Gamble Subsidiaries Savings Plan (the "Plan") as of December 31, 2005 and 2004, 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 standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, 2005 and 2004, and the changes in net assets available for benefits for the years then ended 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 supplemental schedule listed in the table of contents is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is 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. The schedule is the responsibility of the Plan's management. Such schedule has been subjected to the auditing procedures applied in our audit of the basic 2005 financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /S/ DELOITTE & TOUCHE LLP Cincinnati, Ohio June 28, 2006 THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2005 AND 2004 - -------------------------------------------------------------------------------- 2005 2004 PARTICIPANT-DIRECTED INVESTMENTS: At fair value $194,941,672 $198,713,681 At contract value 32,616,492 34,557,774 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS $227,558,164 $233,271,455 ============ ============ See notes to financial statements.
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEARS ENDED DECEMBER 31, 2005 AND 2004 - ------------------------------------------------------------------------------------- 2005 2004 ADDITIONS: Investment income: Net appreciation in fair value of investments $ 6,906,703 $ 15,453,936 Net appreciation in contract value of investments 1,494,462 1,402,644 Interest 115,626 155,080 Dividends 4,940,691 5,571,271 ------------- ------------- Total investment income 13,457,482 22,582,931 ------------- ------------- Rollover and other additions 87,820 ------------- ------------- Total additions 13,457,482 22,670,751 ------------- ------------- DEDUCTIONS: Distributions to and withdrawals by participants 19,063,622 16,482,032 Administrative expenses 107,151 8,725 ------------- ------------- Total deductions 19,170,773 16,490,757 ------------- ------------- (DECREASE) INCREASE IN NET ASSETS (5,713,291) 6,179,994 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 233,271,455 227,091,461 ------------- ------------- End of year $ 227,558,164 $ 233,271,455 ============= ============= See notes to financial statements.
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2005 AND 2004 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The following brief description of The Procter & Gamble Subsidiaries Savings Plan (the "Plan") is provided for general information only. Participants should refer to the Plan agreement for more complete information. GENERAL--The Plan was established effective March 2, 1990 upon the acquisition of the Hawaiian Punch Division of DelMonte by The Procter & Gamble Company (the "Company"). During the period from March 1996 through June 2002, the following plans were merged into the Plan: the Sundor Brands Savings Plan, Max Factor Savings Plan, the Speas Savings Plan, the Tambrands, Inc. Savings Plan ("Tambrands"), the Iams Company Savings Plan ("Iams"), Recovery Engineering, Inc. Salary Savings Plan ("Pur"), the Richardson-Vicks Savings Plan ("Richardson-Vicks"), The Procter & Gamble Subsidiaries Savings and Investment Plan ("Subsidiaries Savings and Investment"), the Procter & Gamble Pharmaceuticals Savings Plan ("Pharmaceuticals"), and the Millstone Coffee, Inc. 401(k) Savings and Profit Sharing Plan ("Millstone"). The Plan is a voluntary defined contribution plan covering all eligible employees of Sundor Group, Inc., including the Sundor Brands and Hawaiian Punch divisions, Max Factor & Company, Speas Company, Tambrands Company, Iams Company, Pur Company, Richardson-Vicks Company, Maryland Club Foods, Inc., Shulton, Inc., Dover Baby Wipes Company, Giorgio Beverly Hills, Inc., Millstone Coffee, Inc., Norwich Eaton, and former employees of Fisher Nut Company who were members of the Twin Cities Bakery and Confectionery Workers Union Local No. 22, all subsidiaries of the Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The Plan is administered by the Master Savings Plan Committee consisting of three members appointed by the Board of Directors of the Company, except for duties specifically vested in the trustee of the Plan, J.P. Morgan Chase Bank, and the Plan recordkeeper, J.P. Morgan Retirement Plan Services LLC, who are also appointed by the Board of Directors of the Company. CONTRIBUTIONS--Effective April 1996, all contributions to the Plan were suspended. Tambrands, Iams, Pur, Richardson-Vicks, Subsidiaries Savings and Investment, Pharmaceuticals, and Millstone Savings Plans were frozen prior to conversion into the Plan. PARTICIPANT ACCOUNTS--Individual accounts are maintained for each Plan participant. Each participant's account is credited with an allocation of the Plan's earnings or losses. The benefit to which a participant is entitled is limited to the benefit that can be provided from their account. Participants can allocate their account to one or all of the investment options offered by the Plan. INVESTMENTS-- Participants direct the investment of their accounts into various investment options offered by the Plan. The Plan currently offers common stock, three mutual funds, a common collective trust fund and an insurance investment contract as investment options for participants. VESTING--Upon suspension of contributions, all participants were vested immediately in their accounts plus actual earnings thereon. PARTICIPANT LOANS--The Plan has a loan feature under which active participants may borrow up to 50% of the current value of their vested account balances exclusive of amounts attributable to Company contributions (up to a maximum of $50,000). Loans are repaid via payroll deduction over a period of up to five years, except for loans used to purchase a primary residence, which are repaid via payroll deduction over a period of up to 10 years. Principal and interest paid is credited to applicable funds in the borrower's account. Former Company participants may not borrow against their account balances. Upon participant termination or retirement, the outstanding loan balance is treated as a distribution to the participant if repayment is not made by the participant. PAYMENT OF BENEFITS--The Plan provides for benefits to be paid upon retirement, disability, death, or separation other than retirement as defined by the Plan document. Plan benefits may be made in a lump sum of cash or shares of Company common stock, in installments over not more than 120 months, or variable amounts paid monthly. Retired or terminated employees shall commence benefit payments upon attainment of age 70 1/2. A participant may withdraw any portion of after-tax contributions once in any three-month period. Participants who have attained age 59 1/2 or have demonstrated financial hardship may withdraw all or any portion of their before-tax contributions once in any six-month period. Account balances attributable to terminated employees are approximately $113,204,000 and $111,648,000 as of December 31, 2005 and 2004, respectively. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING--The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. USE OF ESTIMATES--The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. The Plan invests in Company common stock, J.M. Smucker Company common stock, a common collective trust fund and in various mutual funds that include investments in U.S. Government securities, corporate debt instruments, corporate stocks, and investment contracts. 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 financial statements. INVESTMENT VALUATION AND INCOME RECOGNITION--The Plan's investments are stated at fair value except for its benefit-responsive investment contract, which is valued at contract value (see Note 4). Quoted market prices are used to value investments. Shares of mutual funds are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year end. Loans to participants are valued at the outstanding loan balances. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis and dividends are recorded on the ex-dividend date. Management fees and operating expenses charged to the Plan for investments in the mutual funds are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of net appreciation, or an increase in net depreciation in the fair market value of such investments. ADMINISTRATIVE EXPENSES-- Investment management expenses are paid by the Plan and are netted against investment income. Loan processing fees are paid by the participants through reduction in their investment balances. In addition, effective July 1, 2005, recordkeeping fees of the Plan are paid by participants through a reduction in their investment balances. PAYMENT OF BENEFITS--Benefit payments to participants are recorded upon distribution. There were no amounts allocated to accounts of persons who have elected to withdraw from the Plan but have not yet been paid at December 31, 2005. Amounts allocated to accounts of persons who have elected to withdraw from the Plan but have not yet been paid were $117,000 at December 31, 2004. 3. INVESTMENTS The Plan's investments that represented five percent or more of the Plan's net assets available for benefits as of December 31, 2005 and 2004, are as follows:
DESCRIPTION 2005 2004 At fair value: Barclays Global Investors Equity Index Fund F $ 74,922,244 * The Procter & Gamble Company common stock 57,673,937 $ 58,808,333 Royce Low Priced Stock Fund 25,146,006 26,231,553 PIMCO Total Return Fund 18,356,100 * Fidelity Diversified International Fund 15,431,628 * American Century Equity Index Fund 73,241,670 * J.P. Morgan Bond Fund 18,264,673 * J.P. Morgan International Equity Fund 13,182,595 At contract value-J.P. Morgan Stable Value Fund: * J.P. Morgan Chase Bank Intermediate Bond Fund 31,435,594 33,669,655 * Indicates party-in-interest
During the years ended December 31, 2005 and 2004, 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:
2005 2004 Net appreciation (depreciation) in fair value of: Mutual funds $ 94,083 $ 10,031,751 Common collective trust fund 4,036,583 The Procter & Gamble Company common stock 2,801,242 5,403,907 The J.M. Smucker Company common stock (25,205) 18,278 ------------ ------------ $ 6,906,703 $ 15,453,936 ============ ============ Net appreciation in contract value of- J.P. Morgan Stable Value Fund $ 1,494,462 $ 1,402,644 ============ ============
4. INVESTMENT CONTRACT WITH INSURANCE COMPANY In 2003, the Plan entered into a benefit-responsive investment contract with Monumental Life Insurance Co., Bank of America N.A. and State Street Bank & Trust Company (collectively, the "issuers"). The issuers maintain the contributions in a general account, which is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The investment contract is included in the financial statements at contract value as reported to the Plan by the issuers. Contract value represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The crediting interest rate was 5.11% at December 31, 2005 and 4.36% at December 31, 2004. The crediting interest rate is based on a formula agreed upon with the issuer, but may not be less than zero percent. Such interest rates are reviewed on a quarterly basis for resetting. The average yield was 4.49% for the year ended December 31, 2005 and 3.91% for the year ended December 31, 2004. 5. EXEMPT PARTY-IN-INTEREST TRANSACTIONS Certain Plan investments are shares of mutual funds managed by J.P. Morgan Chase Bank, the trustee of the Plan as defined by the Plan. J.P. Morgan Retirement Plan Services LLC, the recordkeeper, is affiliated with the trustee. Therefore, these transactions qualify as party-in-interest transactions. Fees paid by the Plan for investment management services were included as a reduction of the return earned on each fund. At December 31, 2005 and 2004, the Plan held 996,439 and 1,067,689 shares, respectively, of common stock of the Company, the sponsoring employer, with a cost basis of $26,932,785 and $28,382,420, respectively. During the years ended December 31, 2005 and 2004, the Plan recorded dividend income on Company common stock of $1,131,093 and $1,031,650, respectively. 6. PLAN TERMINATION Although it has not expressed any intention 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. 7. FEDERAL INCOME TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated March 7, 2002, that the Plan and related trust were designed in accordance with the applicable regulations of the Internal Revenue Code. The Plan has been amended since receiving the determination letter; however, the Company and the plan administrator believe that the Plan is currently designed and operated in compliance with the applicable requirements of the Internal Revenue Code and the Plan and related trust continue to be tax-exempt. Therefore, no provision for income taxes has been included in the Plan's financial statements 8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 Upon an event of default in a participant loan, to the extent a distribution to the participant is not permissible under the Plan, the amount due to the Plan on account of the loan will be treated as a deemed distribution. A loan that is a deemed distribution is treated as a distribution on Form 5500 and removed from Plan assets on Form 5500. However, in the Plan financial statements, and in accordance with the Plan, such deemed distributions remain part of the participant's account balance until a distributable event occurs for the participant. The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2005 to Form 5500: 2005 Net assets available for benefits per the financial statements $ 227,558,164 Less: Certain deemed distributions of participant loans (15,358) ------------- Net assets available for benefits per the Form 5500 $ 227,542,806 ============= The following is a reconciliation of the decrease in net assets per the financial statements for the year ended December 31, 2005 to Form 5500 net income: 2005 Net decrease in assets available for benefits per the financial statements $ (5,713,291) Less: Certain deemed distributions of participant loans (15,358) ------------- Net loss per the Form 5500 $ (5,728,649) ============= The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 2005 to Form 5500: 2005 Benefits paid to participants per the financial statements $ 19,063,622 Plus: Deemed loans distributions 15,358 ------------- Benefits paid to participants per the Form 5500 $ 19,078,980 ============= * * * * * * SUPPLEMENTAL SCHEDULE
FORM 5500, SCHEDULE H, PART IV, LINE 4i- SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2005 - -------------------------------------------------------------------------------------------------------------------- FAIR VALUE/ IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT CONTRACT VALUE Investments at fair value: * The Procter & Gamble Company Common stock $ 57,673,937 The J.M. Smucker Company Common stock 365,461 Mutual Funds: The Royce Funds Low Price Fund 25,146,006 * Fidelity Investments Diversified International Fund 15,431,628 PIMCO Total Return Fund 18,356,100 * J.P. Morgan Funds Prime Money Market Fund 1,156,189 Common Collective Trust Fund- Barclays Global Investors Equity Index Fund F 74,922,244 * Loans to participants 309 loans with maturities ranging from January 2006 to January 2015 and interest rates ranging from 5% to 10.5% 1,890,107 ------------- Total 194,941,672 ------------- J.P. Morgan Stable Value Fund at contract value: US Treasury Note, 3.5%, due May 31, 2007 49,371 Common/Collective Trust Funds: * J.P. Morgan Chase Bank Liquidity Fund 332,291 * J.P. Morgan Chase Bank Intermediate Bond Fund 31,435,594 Monumental Life Insurance Company Bank of America, N.A., State Street Bank and Trust Company Wrapper Contract 799,236 ------------- Total 32,616,492 ------------- TOTAL INVESTMENTS $ 227,558,164 ============= * Denotes party-in-interest.
EX-23 2 x232005.txt 11-K - P&G SUB SVGS PLAN - EXHIBIT 23 THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN EXHIBIT 23 - -------------------------------------------------------------------------------- CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statement No. 333-14397 on Form S-8 of our report dated June 28, 2006, appearing in this Annual Report on Form 11-K of The Procter & Gamble Subsidiaries Savings Plan for the year ended December 31, 2005. /S/ DELOITTE & TOUCHE LLP Cincinnati, Ohio June 28, 2006 -----END PRIVACY-ENHANCED MESSAGE-----