-----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, EBI+r8wcApyYoKPNrlYdDEmzXPKgGBZyMQoZizXGobOuP4qgUYdn3Tc+K4sZsD2N R+yw+3KDr8TbX/Y+iwNGWg== 0000080424-99-000017.txt : 19990623 0000080424-99-000017.hdr.sgml : 19990623 ACCESSION NUMBER: 0000080424-99-000017 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990622 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: 99649851 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 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998, OR \ \ FOR 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 name below: Procter & Gamble Pharmaceuticals 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 Schedule prepared in Accordance With the Financial Reporting Requirements of ERISA PROCTER & GAMBLE PHARMACEUTICALS SAVINGS PLAN Financial Statements for the Years Ended December 31, 1998 and 1997 and Independent Auditors' Report PROCTER & GAMBLE PHARMACEUTICALS SAVINGS PLAN TABLE OF CONTENTS - -------------------------------------------------------------------------------- Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits as of December 31, 1998 and 1997 2 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 1998 and 1997 3 Notes to Financial Statements for the Years Ended December 31, 1998 and 1997 4 SUPPLEMENTAL SCHEDULES OMITTED: The following supplemental 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: Reportable Transactions for the Year Ended December 31, 1998 Assets Held for Investment Purposes Assets Acquired and Disposed of Within the Plan Year Party-In-Interest Transaction Obligations in Default Leases in Default DELOITTE & TOUCHE LLP - ------------ --------------------------------------------------------------- DELOITTE & TOUCHE LLP Telephone: (513) 784-7100 250 East Fifth Street P.O. Box 5340 Cincinnati, Ohio 45201-5340 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 Procter & Gamble Pharmaceuticals Savings Plan (the "Plan") as of December 31, 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 December 31, 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 April 30, 1999 PROCTER & GAMBLE PHARMACEUTICALS SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1998 AND 1997 - -------------------------------------------------------------------------------
1998 1997 INVESTMENTS, At fair value: Investment in The Procter & Gamble Master Savings Trust $65,746,638 $55,439,698 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $65,746,638 $55,439,698 =========== =========== See notes to financial statements.
PROCTER & GAMBLE PHARMACEUTICALS SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 - --------------------------------------------------------------------------------
1998 1997 ADDITIONS: Investment income - Equity in net earnings of The Procter and Gamble Master Savings Trust $11,874,994 $10,685,751 Transfer from unaffiliated plans 3,027 1,831 ----------- ----------- Total additions 11,878,021 10,687,582 DEDUCTIONS - Distributions and withdrawals to participants 1,571,081 2,558,761 ----------- ----------- NET INCREASE 10,306,940 8,128,821 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 55,439,698 47,310,877 ----------- ----------- End of year $65,746,638 $55,439,698 =========== =========== See notes to financial statements.
PROCTER & GAMBLE PHARMACEUTICALS SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 - -------------------------------------------------------------------------------- 1. INFORMATION REGARDING THE PLAN The following brief description of the Procter & Gamble Pharmaceuticals Savings Plan (the "Plan") is provided for general information only and reference should be made to the Plan agreement for more complete information. GENERAL - The Norwich Eaton Employee Savings Plan, began on August 1, 1982 and was modified effective July 1, 1985 to meet the requirements under Internal Revenue Code Section 401(k). Norwich Eaton is a wholly-owned subsidiary of The Procter & Gamble Company ("Company"). During 1986, the assets and liabilities of the Norwich Eaton Employee Savings Plan were transferred to create three plans, one for salaried employees, one for hourly employees and one for Norwich Eaton's Greenville location employees. Effective July 1, 1987, the Greenville plan was terminated in connection with a corporate reorganization. Effective June 30, 1994, the hourly plan was merged into the salary plan which created the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). CONTRIBUTIONS AND VESTING - In connection with the cessation of contributions to the Plan effective July 1, 1991, all participants became fully vested and no new participants were allowed in the Plan. Plan participants became eligible to participate in The Procter & Gamble Profit Sharing Trust and Employee Stock Ownership Plan effective July 1, 1991. DISTRIBUTIONS - 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 common stock or in installment payments over a period not to exceed 120 months. Retired or terminated employees shall commence benefit payments upon attainment of age 70 1/2. WITHDRAWALS - A participant may withdraw any portion of after-tax contributions once in any six-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. PLAN TERMINATION - Although the Company has not expressed any intent to do so, it has the right under the Plan to terminate the Plan subject to the provisions of ERISA. ADMINISTRATION - The Plan is administered by the Master Savings Plan Committee consisting of four members appointed by the Board of Directors of the Company, except for duties specifically vested in the trustee, PNC Bank, Ohio, N.A. ("PNC Bank"), who is also appointed by the Board of Directors of the Company. TRANSFER FROM UNAFFILIATED PLANS - Amounts represent account balances of Company employees transferred from unaffiliated Company plans. PARTICIPANT ACCOUNTS AND INVESTMENT OPTIONS - Each participant's account is credited with an allocation of the Plan's earnings. The benefit to which a participant is entitled is limited to the benefit that can be provided from the participant's account. Participants may allocate their account in one or all of the following investment options offered by the Plan (Note 4): RESERVE FUND - The prospectus indicates that this fund invests in short to medium length maturity, interest-bearing instruments. COMPANY STOCK FUND - A fund that invests in shares of The Procter & Gamble Company common stock. MANAGED BOND FUND - The prospectus indicates that this fund invests in a diversified portfolio of publicly and privately traded corporate, government, international and mortgage backed bonds. LARGE COMPANY FUND - The prospectus indicates that this fund invests in equity securities of approximately 300 domestic, large company stocks. DIVERSIFIED FUND - The prospectus indicates that this fund invests in a balanced portfolio consisting of both equity and fixed securities. SMALL COMPANY FUND - The prospectus indicates that this fund invests in a portfolio of equity securities issued by small companies. INTERNATIONAL EQUITY FUND - The prospectus indicates 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 December 31, 1998 and 1997:
Large Managed International Reserve Company Diversified Bond Equity Fund Fund Fund Fund Fund Net assets available for benefits, December 31, 1996 $10,667,861 $23,415,366 $7,831,088 $2,279,413 $507,799 Equity in net earnings of The Procter & Gamble Master Savings Trust 500,220 7,007,716 1,397,269 193,640 4,669 Transfer from unaffiliated plans 879 623 201 128 Distributions and withdrawals to participants (742,408) (1,385,209) (219,178) (167,457) (1,554) Interfund transfers (1,077,297) (1,093,658) (259,403) (216,700) 175,220 ----------- ----------- ---------- ---------- -------- Net assets available for benefits, December 31, 1997 9,349,255 27,944,838 8,749,977 2,089,024 686,134 Equity in net earnings of The Procter & Gamble Master Savings Trust 500,823 8,794,395 1,593,777 151,854 97,376 Transfer from unaffiliated plans 3,027 Distributions and withdrawals to participants (642,537) (530,749) (258,377) (35,603) (220) Interfund transfers (41,997) 207,123 (635,123) 30,006 (73,584) ----------- ----------- ---------- ---------- -------- Net assets available for benefits, December 31, 1998 $ 9,165,544 $36,418,634 $9,450,254 $2,235,281 $709,706 =========== =========== ========== ========== ======== Small Company Company Stock Fund Fund Total Net assets available for benefits, December 31, 1996 $ 942,541 $1,666,809 $47,310,877 Equity in net earnings of The Procter & Gamble Master Savings Trust 246,416 1,335,821 10,685,751 Transfer from unaffiliated plans 1,831 Distributions and withdrawals to participants (2,875) (40,080) (2,558,761) Interfund transfers 497,138 1,974,700 ---------- ---------- ----------- Net assets available for benefits, December 31, 1997 1,683,220 4,937,250 55,439,698 Equity in net earnings of The Procter & Gamble Master Savings Trust (96,256) 833,025 11,874,994 Transfer from unaffiliated plans 3,027 Distributions and withdrawals to participants (26,470) (77,125) (1,571,081) Interfund transfers 42,708 470,867 ---------- ---------- ----------- Net assets available for benefits, December 31, 1998 $1,603,202 $6,164,017 $65,746,638 ========== ========== ===========
2. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES BASIS OF ACCOUNTING - The accompanying financial statements have been 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 an established security exchange. The Plan's investment funds (funds) are valued by the fund manager, J.P. 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 Master Trust by the trustee and to each participant's account by the Plan's recordkeeper. EXPENSES OF THE PLAN - Trustee fees and other expenses of the Plan are paid by the Company. 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. TAX STATUS The Internal Revenue Service has determined and informed the Company by letter dated August 22, 1996 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The plan has been amended since receiving the determination letter. The Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable provisions of the IRC as of December 31, 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 investments that fund various Company-sponsored defined contribution 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 participating plans based upon each plan's proportionate interest in the Master Trust. The following represents the 1998 and 1997 audited financial information regarding the net assets and investment income of the Master Trust: Assets of the Master Trust at December 31, 1998 are summarized as follows:
Inter- Large Small national Managed Company Company Company Equity Reserve Diversified Bond Stock Fund Fund Fund Fund Fund Fund Fund Total Investments, at fair value $82,686,007 $76,750,124 $4,587,218 $2,999,260 $26,401,544 $33,445,663 $6,050,716 $232,920,532 Accrued interest and dividends 4,781 235 47 7 38 32 13 5,153 ----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------ Total $82,690,788 $76,750,359 $4,587,265 $2,999,267 $26,401,582 $33,445,695 $6,050,729 $232,925,685 =========== =========== ========== ========== =========== =========== ========== ============ Plan's investment in Master Trust $ 6,164,016 $36,418,637 $1,603,201 $ 709,706 $ 9,165,543 $ 9,450,254 $2,235,281 $ 65,746,638 =========== =========== ========== ========== =========== =========== ========== ============ Plan's percentage ownership interest in Master Trust 7% 47% 35% 24% 35% 28% 37% 28% =========== =========== ========== ========== =========== =========== ========== ============
Investments, at fair value, held by the Master Trust at December 31, 1998 are summarized as follows:
Inter- Large Small national Managed Company Company Company Equity Reserve Diversified Bond Stock Fund Fund Fund Fund Fund Fund Fund Total The Procter & Gamble Company common stock $82,247,171 $ 82,247,171 Mutual funds $76,778,262 $4,596,117 $3,005,413 $26,409,391 $33,460,753 $6,048,229 150,298,165 Short-term invest- ments (overdraft) 438,836 (28,138) (8,899) (6,153) (7,847) (15,090) 2,487 375,196 ----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------ Total investments at fair value $82,686,007 $76,750,124 $4,587,218 $2,999,260 $26,401,544 $33,445,663 $6,050,716 $232,920,532 =========== =========== ========== ========== =========== =========== ========== ============
Investment income from the Master Trust for the year ended December 31, 1998 is summarized as follows:
Inter- Large Small national Managed Company Company Company Equity Reserve Diversified Bond Stock Fund Fund Fund Fund Fund Fund Fund Total Net appreciation (depreciation) in fair value of investments $11,339,483 $18,695,385 $ (263,745) $ 396,904 $ 1,376,097 $ 4,973,756 $ 416,005 $ 36,933,885 Dividends 1,029,974 1,029,974 Interest 49,241 54 83 22 129 41 125 49,695 ----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------ Total $12,418,698 $18,695,439 $ (263,662) $ 396,926 $ 1,376,226 $ 4,973,797 $ 416,130 $ 38,013,554 =========== =========== ========== ========== =========== =========== ========== ============ Plan's equity in net earnings of Master Trust $ 833,025 $ 8,794,395 $ (96,256) $ 97,376 $ 500,823 $ 1,593,777 $ 151,854 $ 11,874,994 =========== =========== ========== ========== =========== =========== ========== ============
Assets of the Master Trust at December 31, 1997 are summarized as follows:
Inter- Large Small national Managed Company Company Company Equity Reserve Diversified Bond Stock Fund Fund Fund Fund Fund Fund Fund Total Investments, at fair value $75,945,362 $60,121,937 $4,728,540 $2,629,430 $28,051,469 $33,669,298 $5,858,170 $211,004,206 Accrued interest and dividends 6,317 141 22 16 380 101 26 7,003 ----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------ Total $75,951,679 $60,122,078 $4,728,562 $2,629,446 $28,051,849 $33,669,399 $5,858,196 $211,011,209 =========== =========== ========== ========== =========== =========== ========== ============ Plan's investment in Master Trust $ 4,991,143 $27,924,111 $1,780,948 $ 669,762 $ 9,323,392 $ 8,683,447 $2,066,895 $ 55,439,698 =========== =========== ========== ========== =========== =========== ========== ============ Plan's percentage ownership interest in Master Trust 7% 46% 38% 25% 33% 26% 35% 26% =========== =========== ========== ========== =========== =========== ========== ============
Investments, at fair value, held by the Master Trust at December 31, 1997 are summarized as follows:
Inter- Large Small national Managed Company Company Company Equity Reserve Diversified Bond Stock Fund Fund Fund Fund Fund Fund Fund Total The Procter & Gamble Company common stock $74,844,561 $ 74,844,561 Mutual funds $60,121,830 $4,728,479 $2,629,377 $27,988,957 $33,669,235 $5,858,117 134,995,995 Short-term invest- ments 1,100,801 107 61 53 62,512 63 53 1,163,650 ----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------ Total investments at fair value $75,945,362 $60,121,937 $4,728,540 $2,629,430 $28,051,469 $33,669,298 $5,858,170 $211,004,206 =========== =========== ========== ========== =========== =========== ========== ============
Investment income from the Master Trust for the year ended December 31, 1997 is summarized as follows:
Inter- Large Small national Managed Company Company Company Equity Reserve Diversified Bond Stock Fund Fund Fund Fund Fund Fund Fund Total Net appreciation in fair value of investments $22,915,525 $15,017,239 $ 817,130 $ 52,370 $ 1,468,561 $ 5,581,761 $ 520,449 $ 46,373,035 Dividends 836,156 836,156 Interest 56,289 3,197 59,486 ----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------ Total $23,807,970 $15,017,239 $ 817,130 $ 52,370 $ 1,471,758 $ 5,581,761 $ 520,449 $ 47,268,677 =========== =========== ========== ========== =========== =========== ========== ============ Plan's equity in net earnings of Master Trust $ 1,335,821 $ 7,007,716 $ 246,416 $ 4,669 $ 500,220 $ 1,397,269 $ 193,640 $ 10,685,751 =========== =========== ========== ========== =========== =========== ========== ============
5. DISTRIBUTIONS PAYABLE Distributions payable to participants at December 31, 1998 and 1997 are approximately $530,000 and $128,000, respectively. * * * * * * 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. Procter & Gamble Pharmaceuticals Savings Plan /s/THOMAS J. MESS Date: June 22, 1999 --------------------------------------- Thomas J. Mess Secretary for Trustees EXHIBIT INDEX Exhibit No. Page No. 23 Consent of Deloitte & Touche EX-23 2 Deloitte & Touche LLP - ----------- ---------------------------------------------------------- 250 East Fifth Street Telephone: (513) 784-7100 P.O. Box 5340 Cincinnati, Ohio 45201-5340 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 333-14389 of The Procter & Gamble Company on Form S-8 of our report dated April 30, 1999 appearing in this Annual Report on Form 11-K of The Procter & Gamble Pharmaceuticals Savings Plan for the year ended December 31, 1998. /s/DELOITTE & TOUCHE LLP Cincinnati, Ohio June 21, 1999 - ----------------- Deloitte Touche Tohmatsu International - ----------------- -----END PRIVACY-ENHANCED MESSAGE-----