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, 1997, 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 named 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 Schedules Prepared in Accordance With
the Financial Reporting Requirements of ERISA
PROCTER & GAMBLE PHARMACEUTICALS SAVINGS PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1997 AND 1996 AND
INDEPENDENT AUDITORS' REPORT
PROCTER & GAMBLE PHARMACEUTICALS SAVINGS PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of
December 31, 1997 and 1996 2
Statement of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 1997 and 1996 3
Notes to Financial Statements for the Years Ended
December 31, 1997 and 1996 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, 1997
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
- ------------ ------------------------------------------------------
250 East Fifth Street Telephone: (513) 784-7100
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, 1997 and 1996, 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, the financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1997 and 1996, and the changes in net assets available for benefits for the year
then ended in conformity with generally accepted accounting principles.
/S/DELOITTE & TOUCHE LLP
- --------------------------
Deloitte & Touche LLP
May 8, 1998
- -----------------
Deloitte Touche
Tohmatsu
International
- -----------------
<TABLE>
PROCTER & GAMBLE PHARMACEUTICALS SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997 AND 1996
- ------------------------------------------------------------------------------
<CAPTION>
1997 1996
<S> <C> <C>
INVESTMENTS, At fair value:
Investment in The Procter & Gamble Master
Savings Trust $55,439,698 $47,310,877
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $55,439,698 $47,310,877
=========== ===========
See notes to financial statements.
</TABLE>
<TABLE>
PROCTER & GAMBLE PHARMACEUTICALS SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
- -----------------------------------------------------------------------------
<CAPTION>
1997 1996
<S> <C> <C>
ADDITIONS:
Investment income:
Equity in net earnings of The Procter &
Gamble Master Savings Trust $10,685,751 $ 6,786,952
Transfer from an unaffiliated plan 1,831 65,486
----------- -----------
Total additions 10,687,582 6,852,438
DEDUCTIONS - Distributions to participants
and other 2,558,761 3,751,462
----------- -----------
NET INCREASE 8,128,821 3,100,976
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 47,310,877 44,209,901
----------- -----------
End of year $55,439,698 $47,310,877
=========== ===========
See notes to financial statements.
</TABLE>
PROCTER & GAMBLE PHARMACEUTICALS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
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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
after that date. 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 it has not expressed any intent to do so,
the Company 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 three members appointed by the Board of
Directors of the Company, except for duties specifically vested in the
trustee, who is also appointed by the Board of Directors of the
Company.
TRANSFER FROM UNAFFILIATED PLAN - 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 - A fund investing in short to medium length
maturity, interest-bearing instruments.
COMPANY STOCK FUND - A fund investing in shares of The Procter
& Gamble Company common stock.
MANAGED BOND FUND - A fund investing in a diversified
portfolio of publicly and privately traded corporate,
government, international and mortgage backed bonds.
LARGE COMPANY FUND - A fund investing in equity securities of
approximately 300 domestic, large company stocks.
DIVERSIFIED FUND - A fund investing in a balanced portfolio
consisting of both equity and fixed securities.
SMALL COMPANY FUND - A fund investing in a portfolio of equity
securities issued by small companies.
INTERNATIONAL EQUITY FUND - A fund investing in a diversified
portfolio of equity securities of foreign corporations.
<TABLE>
The activity and balances in the funds are summarized as follows for the years
ended December 31, 1997 and 1996:
<CAPTION>
LARGE MANAGED INTERNATIONAL SMALL COMPANY
RESERVE COMPANY DIVERSIFIED BOND EQUITY COMPANY STOCK
FUND FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets available
for benefits,
December 31, 1995 $13,524,996 $20,091,766 $7,644,210 $2,948,929 $44,209,901
Equity in net earnings
of The Procter &
Gamble Master
Savings Trust 636,921 4,847,674 1,051,851 136,427 $ 11,228 $ 60,895 $ 41,956 6,786,952
Transfer from an
unaffiliated plan 65,486 65,486
Distributions to
participants (1,622,886) (1,173,440) (616,309) (338,827) (3,751,462)
Interfund transfers (1,936,656) (350,634) (248,664) (467,116) 496,571 881,646 1,624,853
----------- ----------- ---------- ---------- -------- ---------- ---------- -----------
Net assets available
for benefits,
December 31, 1996 10,667,861 23,415,366 7,831,088 2,279,413 507,799 942,541 1,666,809 47,310,877
Equity in net earnings
of The Procter &
Gamble Master
Savings Trust 500,220 7,007,716 1,397,269 193,640 4,669 246,416 1,335,821 10,685,751
Transfer from an
unaffiliated plan 879 623 201 128 1,831
Distributions to
participants and other (742,408) (1,385,209) (219,178) (167,457) (1,554) (2,875) (40,080) (2,558,761)
Interfund transfers (1,077,297) (1,093,658) (259,403) (216,700) 175,220 497,138 1,974,700
----------- ----------- ---------- ---------- -------- ---------- ---------- -----------
Net assets available
for benefits,
December 31, 1997 $ 9,349,255 $27,944,838 $8,749,977 $2,089,024 $686,134 $1,683,220 $4,937,250 $55,439,698
=========== =========== ========== ========== ======== ========== ========== ===========
</TABLE>
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
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 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 - 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. INCOME 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 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, 1997 and 1996.
4. INTEREST IN MASTER TRUST
Effective January 1, 1993, the Company formed the Master Trust in
accordance with a master trust agreement with the Trustee.
Use of a master trust permits the commingling of investments that fund
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 1997 and 1996 audited financial
information regarding the net assets and investment income of the
Master Trust:
<TABLE>
Assets of the Master Trust at December 31, 1997 are summarized as follows:
<CAPTION>
LARGE SMALL INTERNATIONAL MANAGED
COMPANY COMPANY COMPANY EQUITY RESERVE DIVERSIFIED BOND
STOCK FUND FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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%
=========== =========== ========== =========== =========== =========== ========== ============
</TABLE>
<TABLE>
Investments, at fair value, held by the Master Trust at December 31, 1997 are
summarized as follows:
<CAPTION>
LARGE SMALL INTERNATIONAL MANAGED
COMPANY COMPANY COMPANY EQUITY RESERVE DIVERSIFIED BOND
STOCK FUND FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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 investments 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
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
<TABLE>
Investment income from the Master Trust for the year ended December 31, 1997 is
summarized as follows:
<CAPTION>
LARGE SMALL INTERNATIONAL MANAGED
COMPANY COMPANY COMPANY EQUITY RESERVE DIVERSIFIED BOND
STOCK FUND FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
=========== =========== ======== ======= ========== ========== ======== ===========
</TABLE>
<TABLE>
Assets of the Master Trust at December 31, 1996 are summarized as follows:
<CAPTION>
COLLECTIVE LARGE SMALL INTERNATIONAL MANAGED
INCOME COMPANY COMPANY COMPANY EQUITY RESERVE DIVERSIFIED BOND
FUND STOCK FUND FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments,
at fair value $ - $44,722,820 $48,644,442 $2,637,484 $1,863,770 $32,149,667 $32,299,750 $5,790,354 $168,108,287
Accrued
interest and
dividends $ - 6,336 263 51 35 382 152 23 7,242
---------- ----------- ----------- ---------- ----------- ----------- ----------- ---------- ------------
Total $ - $44,729,156 $48,644,705 $2,637,535 $1,863,805 $32,150,049 $32,299,902 $5,790,377 $168,115,529
========== =========== =========== ========== ========== =========== =========== ========== ============
Plan's
investment
in Master
Trust $ - $ 1,602,237 $23,423,686 $ 889,496 $ 486,516 $10,630,861 $ 7,851,035 $2,427,046 $ 47,310,877
========== =========== =========== ========== ========== =========== =========== ========== ============
Plan's
percentage
ownership
interest
in Master
Trust - 4% 48% 34% 26% 33% 24% 42% 28%
========== =========== =========== ========= ========== =========== =========== ========== ============
</TABLE>
<TABLE>
Investments, at fair value, held by the Master Trust at December 31, 1996 are
summarized as follows:
<CAPTION>
COLLECTIVE LARGE SMALL INTERNATIONAL MANAGED
INCOME COMPANY COMPANY COMPANY EQUITY RESERVE DIVERSIFIED BOND
FUND STOCK FUND FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Procter &
Gamble Company
common stock $ $43,559,282 $ 43,559,282
Mutual Funds $48,644,294 $2,637,437 $1,863,743 $32,085,388 $32,299,639 $5,790,250 123,320,751
Short-term
investments 1,163,538 148 47 27 64,279 111 104 1,228,254
---------- ----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------
Total $ - $44,722,820 $48,644,442 $2,637,484 $1,863,770 $32,149,667 $32,299,750 $5,790,354 $168,108,287
========== =========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
<TABLE>
Investment income from the Master Trust for the year ended December 31, 1996 is
summarized as follows:
<CAPTION>
COLLECTIVE LARGE SMALL INTERNATIONAL MANAGED
INCOME COMPANY COMPANY COMPANY EQUITY RESERVE DIVERSIFIED BOND
FUND STOCK FUND FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net appreciation
in fair value
of investments $50,196 $ 9,402,213 $9,601,531 $170,571 $36,190 $1,717,880 $4,251,429 $316,106 $25,546,116
Dividends 695,063 695,063
Interest 179,397 9,911 189,308
------- ----------- ---------- -------- -------- ---------- ---------- -------- -----------
Total $50,196 $10,276,673 $9,601,531 $170,571 $36,190 $1,727,791 $4,251,429 $316,106 $26,430,487
======= =========== ========== ======== ======= ========== ========== ======== ===========
Plan's equity in net
earnings of Master
Trust $ - $ 41,956 $4,847,674 $ 60,895 $11,228 $ 636,921 $1,051,851 $136,427 $ 6,786,952
======= =========== ========== ======== ======= ========== ========== ======== ===========
</TABLE>
5. DISTRIBUTIONS PAYABLE
Distributions payable to participants as of December 31, 1997 and 1996
are approximately $128,000 and $296,000, 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/JOSEPH R. LAWHEAD
Date: June 25, 1998 ---------------------------------------
Joseph R. Lawhead
Member, Benefits Committee
EXHIBIT INDEX
Exhibit No. Page No.
23 Consent of Deloitte & Touche
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 May
8, 1998 appearing in this Annual Report on Form 11-K of The Procter & Gamble
Pharmaceuticals Savings Plan for the year ended December 31, 1997.
/s/DELOITTE & TOUCHE LLP
Cincinnati, Ohio
June 24, 1998
- -----------------
Deloitte Touche
Tohmatsu
International
- -----------------
