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
\ \ 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
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997, SUPPLEMENTAL
SCHEDULES FOR THE YEAR ENDED DECEMBER 31, 1998
AND INDEPENDENT AUDITORS' REPORT
THE PROCTER & GAMBLE COMMERCIAL
COMPANY EMPLOYEES' 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, 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 4-7
Supplemental Schedules:
Schedule I - Item 27a - Assets Held for Investment as of
December 31, 1998 8
Schedule II - Item 27d - Reportable Transactions for the
Year Ended December 31, 1998 9
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, 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 its net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment as of December 31, 1998 and (2) reportable transactions for
the year ended December 31, 1998 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 supplemental schedules have been subjected to the auditing
procedures applied in our audits of the basic 1998 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 23, 1999
<TABLE>
THE PROCTER & GAMBLE COMMERCIAL
COMPANY EMPLOYEES' SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<CAPTION>
1998 1997
<S> <C> <C>
INVESTMENTS:
Commingled trust investments at fair value
(Notes 1, 2 and 3):
Fixed Income Fund $ 116,547 $ 144,975
Growth Fund 1,482,380 1,062,909
Equity Fund 660,654 589,624
The Procter & Gamble Company Common Stock Fund 2,449,147 2,054,702
---------- ----------
Total commingled trust investments at fair value 4,708,728 3,852,210
NET ASSETS AVAILABLE FOR BENEFITS $4,708,728 $3,852,210
========== ==========
See notes to financial statements.
</TABLE>
<TABLE>
THE PROCTER & GAMBLE COMMERCIAL
COMPANY EMPLOYEES' SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<CAPTION>
1998 1997
<S> <C> <C>
ADDITIONS:
Commingled trust investment income:
Net appreciation in fair value of investments
(Notes 1 and 3) $ 524,464 $ 793,048
Interest and dividends 190,317 131,319
---------- ----------
Total commingled trust investment income 714,781 924,367
---------- ----------
Contributions:
Plan participants 594,048 529,516
Plan sponsor 140,321 166,556
---------- ----------
Total contributions 734,369 696,072
---------- ----------
Total additions 1,449,150 1,620,439
DEDUCTIONS - Benefits paid to participants (592,632) (335,930)
---------- ----------
NET INCREASE 856,518 1,284,509
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 3,852,210 2,567,701
---------- ----------
End of Year $4,708,728 $3,852,210
========== ==========
See notes to financial statements.
</TABLE>
THE PROCTER & GAMBLE COMMERCIAL
COMPANY EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
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1. DESCRIPTION OF THE PLAN
The Procter & Gamble Commercial Company Employees' Savings Plan (the
"Plan") is a voluntary defined contribution plan available for all regular,
full-time employees of The Procter & Gamble Commercial Company who are
residents of Puerto Rico, have completed one year of service, and whose
conditions of employment are not subject to a collective bargaining
agreement, unless such agreement provides to the contrary. The Plan was
established effective November 1, 1993 and is sponsored by The Procter &
Gamble Commercial Company (the "Company"). Employees may contribute,
through payroll deductions, from 1% to 10% of their compensation. The
Company makes matching contributions to the Plan for each pay period equal
to 40% of the first 5% of compensation the participant elects to contribute
to the Plan. Forfeitures of non-vested Company contributions are used to
reduce future Company contributions to the Plan. Participants are always
100% vested in their personal contributions and any earnings thereon.
Participants become 100% vested in the Company matching contributions on
their behalf upon the occurrence of any of the following events: completion
of five years of service with the Company; attaining age 65; total
disability while employed by the Company or death while employed by the
Company. Upon participants' termination or retirement, their vested account
balance will be paid in a single lump sum in cash or in Procter & Gamble
common stock. If participants terminate employment before retirement and
the account balance in their Company matching contributions account exceeds
$3,500, it will not be distributed to the participants until their 65th
birthday, unless participants and their spouse (if applicable) consent in
writing to an earlier distribution. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA"). Although
it has not expressed any intent 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 of ERISA. In the event of plan termination,
participants will become 100% vested in their accounts.
Under the provisions of the Plan, participating employees may elect to
invest their contributions in one or more of the following commingled trust
investment funds that are administered by Oriental Bank & Trust (the
"Trustee"):
FIXED INCOME FUND - Invests in fixed income obligations including
short-term securities issued or guaranteed by the United States government.
This fund intends to obtain high interest rates through low risk short-term
investments while preserving the principal. This option consists of shares
of the Fidelity Government Investment fund.
GROWTH FUND - Invests in diversified growth stocks of large United States
and multinational companies whose earnings have been increasing
consistently over the years. This fund seeks a long-term capital growth.
This option consists of shares of the Fidelity Growth Opportunity fund.
EQUITY FUND - Invests in common stocks of large United States and
multinational companies. This fund seeks long-term capital growth by
participating in the growth of the economy. This option consists of shares
of the Fidelity Balance Class fund.
THE PROCTER & GAMBLE COMPANY COMMON STOCK FUND - Invests solely in common
stock of The Procter & Gamble Company.
<TABLE>
The activity and balances in the funds are summarized as follows for the years
ended December 31, 1998 and 1997:
<CAPTION>
THE PROCTER &
FIXED GAMBLE COMPANY
INCOME GROWTH EQUITY COMMON STOCK
FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C>
Net asset available for
benefits, December 31, 1996 $ 161,909 $ 752,872 $ 432,208 $1,220,712 $2,567,701
---------- ---------- ---------- ---------- ----------
Net appreciation (depreciation)
in fair value of investments (2,442) 169,277 75,886 550,327 793,048
Interest and dividends (35,310) 27,570 12,631 126,428 131,319
---------- ---------- ---------- ---------- ----------
Total commingled trust
investment income (37,752) 196,847 88,517 676,755 924,367
Contributions 40,555 188,868 110,447 356,202 696,072
Benefits paid to participants (20,976) (72,829) (44,066) (198,059) (335,930)
Net interfund transfers 1,239 (2,849) 2,518 (908) -
---------- ---------- ---------- ---------- ----------
Net assets available for
benefits, December 31, 1997 144,975 1,062,909 589,624 2,054,702 3,852,210
---------- ---------- ---------- ---------- ----------
Net appreciation
in fair value of investments 10,964 283,869 87,033 142,598 524,464
Interest and dividends 190,317 190,317
---------- ---------- ---------- ---------- ----------
Total commingled trust
investment income 10,964 283,869 87,033 332,915 714,781
Contributions 30,963 231,444 106,960 365,002 734,369
Benefits paid to participants (39,830) (133,092) (69,800) (349,910) (592,632)
Net interfund transfers (30,525) 37,250 (53,163) 46,438 -
---------- ---------- ---------- ---------- ----------
Net assets available for
benefits, December 31, 1998 $ 116,547 $1,482,380 $ 660,654 $2,449,147 $4,708,728
========== ========== ========== ========== ==========
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared
under the accrual method of accounting.
VALUATION OF INVESTMENTS - All investments are stated at fair value.
PLAN EXPENSES - All expenses incurred in administering the Plan may be paid
out of the invested assets unless paid by the Company.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
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 reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
3. INVESTMENTS
At December 31, 1998, the Plan owned 1.8%, 5.9% and 4.8% (1.8%, 4.3% and
4.1% at December 31, 1997) of the total current value of the investments of
the Fixed Income Fund, Growth Fund and Equity Fund, respectively.
Investment income and the net appreciation (depreciation) in the fair value
of the investments held by the Trustee's commingled trust are allocated to
the participating defined contribution plans based on each plan's
proportional interest in the fair value of such investments.
4. PARTY IN INTEREST INVESTMENTS AND TRANSACTIONS
The Procter & Gamble Commercial Company is a party-in-interest, as defined
by ERISA. There were no prohibited party-in-interest investments or
transactions for the years ended December 31, 1998 and 1997.
5. 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
for their accounts until such time as the participant or the participant's
beneficiary receives distributions from the Plan.
6. BENEFITS PAYABLE
As of December 31, 1998 and 1997, net assets available for benefits
included benefits of $2,613 and $49,956, respectively, due to participants
who have withdrawn from participation in the Plan.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
<TABLE>
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500:
<CAPTION>
DECEMBER 31,
-------------------------
1998 1997
<S> <C> <C>
Net assets available for benefits
per the financial statements $4,708,728 $3,852,210
Amounts allocated to withdrawing
participants (49,956)
---------- ----------
Net assets available for benefits
per Form 5500 $4,708,728 $3,802,254
========== ==========
</TABLE>
<TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------------
1998 1997
<S> <C> <C>
Benefits paid to participants per
the financial statements $592,632 $335,930
Add: Net increase (decrease) in
benefits payable (49,956) 24,472
-------- --------
Benefits paid to participants per
Form 5500 $542,676 $360,402
======== ========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefits that have been approved for payment prior to December 31 but
not yet paid as of that date.
* * * * * *
<TABLE>
SCHEDULE I
THE PROCTER & GAMBLE COMMERCIAL
COMPANY EMPLOYEES' SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1998
- ---------------------------------------------------------------------------------
<CAPTION>
IDENTITY OF ISSUE UNITS COST FAIR VALUE
<S> <C> <C> <C>
Fixed Income Fund 11,773.13 $ 92,339 $ 116,547
Growth Fund 29,595.54 862,065 1,482,380
Equity Fund 35,436.59 448,970 660,654
The Procter & Gamble Company
Common Stock Fund 26,862.50 1,401,778 2,449,147
---------- ----------
Total commingled trust investments $2,805,152 $4,708,728
========== ==========
</TABLE>
<TABLE>
SCHEDULE II
THE PROCTER & GAMBLE COMMERCIAL
COMPANY EMPLOYEES' SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT
EXPENSES VALUE OF
INCURRED ASSET ON NET GAIN
DESCRIPTION OF NUMBER OF PURCHASE SELLING WITH COST OF TRANSACTION OR LOSS
ASSET TRANSACIIONS AMOUNT AMOUNT TRANSACTION ASSET DATE ON SALE
<S> <C> <C> <C> <C> <C> <C> <C>
Equity Fund 22 $106,960 $124,868 None $ 85,599 $124,868 $ 39,269
Fixed Income Fund 20 30,963 68,739 None 58,943 68,739 9,796
Growth Fund 25 231,444 100,383 None 53,842 100,383 46,541
The Procter & Gamble Company
Common Stock Fund 50 365,002 270,988 None 108,676 270,988 162,312
</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
thereunto duly authorized.
The Procter & Gamble Commercial
Company Employees' Savings Plan
DATE June 24, 1999 /s/DIANA VEGA
----------------------------------
Diana Vega
For the Savings Plan Committee,
Administrator of The Procter &
Gamble Commercial Company
Employees' Savings Plan
EXHIBIT INDEX
Exhibit No. Page No.
23 Consent of Deloitte & Touche
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
033-50273 of The Procter & Gamble Company on Form S-8 of our report dated
June 23, 1999 appearing in this Annual Report on Form 11-K of The Procter &
Gamble Commercial Company Employees' Savings Plan for the year ended
December 31, 1998.
/S/DELOITTE & TOUCHE LLP
- ----------------------
Deloitte & Touche LLP
San Juan, Puerto Rico
June 23, 1999
