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, 1999, 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,
1999 and 1998 and Independent Auditor's Report
THE PROFIT SHARING RETIREMENT PLAN OF
THE PROCTER & GAMBLE COMMERCIAL COMPANY
TABLE OF CONTENTS
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PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits, June 30,
1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits
for the Years Ended June 30, 1999 and 1998 3
Notes to Financial Statements for the Years Ended June 30,
1999 and 1998 4
SUPPLEMENTAL SCHEDULES OMITTED - The following schedules were
omitted 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, 1999
Assets Acquired and Disposed of Within Plan Year
Party-in-Interest Transactions
Obligations in Default
Leases in Default
DELOITTE &
TOUCHE
- ---------- ------------------------------------------------------
LOGO DELOITTE & TOUCHE LLP Telephone: (513) 784-7100
250 East Fifth Street
P.O. Box 5340
Cincinnati, Ohio 45201-5340
INDEPENDENT AUDITORS' CONSENT
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, 1999 and 1998, 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, 1999
and 1998 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
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Deloitte & Touche LLP
November 5, 1999
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DELOITTE TOUCHE
TOHMATSU
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THE PROFIT SHARING RETIREMENT PLAN OF
THE PROCTER & GAMBLE COMMERCIAL COMPANY
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS,
JUNE 30, 1999 AND 1998
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1999 1998
ASSETS:
Investment in The Procter & Gamble Master
Savings Trust, at fair value $37,272,151 $34,552,463
Contributions receivable 2,204,807 2,188,316
----------- -----------
Total Assets 39,476,958 36,740,779
LIABILITIES - Accrued administrative expenses 21,365 -
NET ASSETS AVAILABLE FOR BENEFITS $39,455,593 $36,740,779
=========== ===========
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, 1999 AND 1998
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1999 1998
ADDITIONS:
Equity in net earnings of The Procter &
Gamble Master Savings Trust $ 2,505,783 $ 6,705,963
Company contributions (net of forfeitures) 2,200,387 2,324,548
----------- -----------
Total additions 4,706,170 9,030,511
----------- -----------
DEDUCTIONS
Distributions to participants 1,914,709 3,217,965
Administrative expenses 76,647 -
----------- -----------
Total deductions 1,991,356 3,217,965
----------- -----------
NET INCREASE 2,714,814 5,812,546
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 36,740,779 30,928,233
----------- -----------
End of year $39,455,593 $36,740,779
=========== ===========
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, 1999 AND 1998
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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 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, 1999 and 1998, 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%
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, 1999 and 1998 are approximately
$161,000 and $13,500, 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 contributions.
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.
<TABLE>
The activity and balances in the funds are summarized as follows for the years
ended June 30, 1999 and 1998:
<CAPTION>
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
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
Equity in net earnings of The
Procter & Gamble Master
Savings Trust 179,413 (31,806) 4,896 710,139 1,623,745 4,513 14,883 2,505,783
Company contributions (Net) 73,718 1,348,826 24,140 669,911 40,204 25,501 18,087 2,200,387
Distributions to participants (195,039) (1,055,475) (1,005) (219,096) (442,606) (289) (1,199) (1,914,709)
Administrative fees (5,308) (1,104) (11,631) (51,722) (4,119) (2,763) (76,647)
Interfund transfers (161,202) 342,556 (6,490) 155,653 (289,214) (12,844) (28,459)
---------- ----------- -------- ---------- ----------- ------- -------- -----------
Net assets available for
benefits, June 30, 1999 $3,390,749 $19,594,730 $202,825 $3,878,763 $12,166,813 $102,413 $119,300 $39,455,593
========== =========== ======== ========== =========== ======== ======== ===========
</TABLE>
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
Company common stock is valued at t he 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
Master Trust and each participant's account by PNC Bank, Ohio, N.A., (PNC
Bank), the trustee of the Plan.
EXPENSES OF THE PLAN - Fees charged by the investment manager are paid by
the Plan in 1999 while all other fees are paid by the Company. The Company
paid all Plan fees in 1998.
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, 1999 and 1998 and no provision for income taxes
has been reflected.
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 1999 and 1998 audited
information regarding the net assets and investment income of the Master
Trust:
<TABLE>
<CAPTION>
Assets of the Master Trust at June 30, 1999 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
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at
fair value $25,406,393 $77,806,502 $5,747,564 $34,829,757 $87,611,905 $4,543,242 $3,158,289 $239,103,652
Accrued interest
and dividends 4 33 4 18 49 5 3 116
----------- ----------- ---------- ----------- ----------- ---------- ---------- ------------
Total $25,406,397 $77,806,536 $5,747,568 $34,829,775 $87,611,954 $4,543,247 $3,158,292 $239,103,768
=========== =========== ========== =========== =========== ========== ========== ============
Plan's investment
in Master Trust $ 3,317,252 $18,146,038 $ 179,107 $12,133,928 $ 3,315,519 $ 79,810 $ 100,497 $ 37,272,151
=========== =========== ========== =========== =========== ========== ========== ============
Plan's percentage
ownership in
Master Trust 13% 23% 3% 35% 4% 2% 3% 16%
=========== =========== ========== =========== =========== ========== ========== ============
<CAPTION>
Investments held by the Master Trust at June 30, 1999 are summarized as follows
at fair value:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Procter &
Gamble Company
common stock $77,805,919 $ 77,805,919
Mutual Funds $25,406,393 $5,747,564 $34,829,757 $87,611,905 $4,543,242 $3,158,289 161,297,150
Short-term
investments 583 583
----------- ----------- ---------- ----------- ----------- ---------- ---------- ------------
Total investments
at fair value $25,406,393 $77,806,502 $5,747,564 $34,829,757 $87,611,905 $4,543,242 $3,158,289 $239,103,652
=========== =========== ========== =========== =========== ========== ========== ============
<CAPTION>
Investment income from the Master Trust for the Year Ended June 30, 1999 is
summarized as follows:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net appreciation
(depreciation
in fair value of
investments $ 1,226,243 $ (939,577) $ 141,508 $ 3,443,603 $18,078,571 $ (157,982) $ 197,213 $ 21,989,579
Dividends 1,059,358 1,059,358
Interest 43,070 43,070
----------- ----------- ---------- ----------- ----------- ---------- ---------- ------------
Total $ 1,226,243 $ 162,851 $ 141,508 $ 3,443,603 $18,078,571 $ (157,982) $ 197,213 $ 23,092,007
=========== =========== ========== =========== =========== ========== ========== ============
Plan's equity
in net earnings
of Master Trust $ 179,413 $ (31,806) $ 4,896 $ 1,623,745 $ 710,139 $ 4,513 $ 14,883 $ 2,505,783
=========== =========== ========== =========== =========== ========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
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
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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%
=========== =========== ========== =========== =========== ========== ========== ============
<CAPTION>
Investments held by the Master Trust at June 30, 1998 are summarized as follows
at fair value:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
=========== =========== ========== =========== =========== ========== ========== ============
<CAPTION>
Investment income from the Master Trust for the Year Ended June 30, 1998 is
summarized as follows:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
=========== =========== ========== =========== =========== ========== ========== ============
</TABLE>
* * * * * *
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 16, 1999 ---------------------------------------
Thomas J. Mess
Member, Policy Committee
EXHIBIT INDEX
Exhibit No. Page No.
23 Consent of Deloitte & Touche
DELOITTE &
TOUCHE
- ---------- ------------------------------------------------------
LOGO 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 5, 1999 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, 1999.
/S/DELOITTE & TOUCHE LLP
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Cincinnati, Ohio
December 14, 1999
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DELOITTE TOUCHE
TOHMATSU
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