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 named below: 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
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN
Financial Statements for the Years Ended
December 31, 1998 and 1997 and Independent
Auditors' Report
THE PROCTER & GAMBLE SUBSIDIARIES 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 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 Transactions
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 Subsidiaries 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 & TOUCH LLP
April 30, 1999
<TABLE>
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<CAPTION>
1998 1997
<S> <C> <C>
INVESTMENTS, At fair value -
Investment in The Procter & Gamble
Master Savings Trust $13,287,055 $11,918,617
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $13,287,055 $11,918,617
=========== ===========
See notes to financial statements.
</TABLE>
<TABLE>
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<CAPTION>
1998 1997
<S> <C> <C>
ADDITIONS:
Investment income - Equity in net
earnings of The Procter & Gamble
Master Savings Trust $ 2,203,411 $ 2,620,532
DEDUCTIONS - Distributions and
withdrawals to participants 834,973 736,117
----------- -----------
NET INCREASE 1,368,438 1,884,415
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 11,918,617 10,034,202
----------- -----------
End of year $13,287,055 $11,918,617
=========== ===========
See notes to financial statements.
</TABLE>
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
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 ("Company"). Effective March 14, 1996, the Sundor Brands
Savings Plan, Max Factor Savings Plan and Speas Savings Plan were merged
into the Plan. 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 and Speas Company, all
subsidiaries of the Company. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS AND VESTING - Effective April 1996, all contributions to the
Plan were suspended and all participants became fully vested.
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, in installment payments over a period not to exceed 180
months or an annuity. 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.
PARTICIPANT ACCOUNTS AND INVESTMENT OPTIONS - 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 may allocate their account in one
or all of the following investment options offered by the Plan (Note 4):
RESERVE FUND - The prospectus states that this fund invests in short to
medium length maturity, interest-bearing instruments.
COMPANY STOCK FUND - 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.
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 a
balanced portfolio consisting of both equity and fixed securities.
INTERNATIONAL EQUITY FUND - The prospectus states that this fund invests
in a diversified portfolio of equity securities of foreign corporations.
SMALL COMPANY FUND - The prospectus states that this fund invests in a
portfolio of equity securities issued by small companies.
<TABLE>
The activity and balances in the funds are summarized as follows the years ended
December 31, 1998 and 1997.
<CAPTION>
Company Large Small International
Stock Company Company Equity Reserve Diversified
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Net assets available for benefits,
December 31, 1996 $ 954,386 $4,972,294 $107,640 $41,693 $2,677,005 $1,107,687
Equity in net earnings of The Procter
& Gamble Master Savings Trust 1,014,079 1,274,606 33,626 2,304 123,211 158,822
Distributions and withdrawals
to participants (96,981) (352,418) (10,983) (9,270) (173,258) (80,797)
Interfund transfers 2,103,559 (1,523,583) 37,364 7,336 (313,147) (304,305)
---------- ---------- -------- ------- ----------- ----------
Net assets available for benefits,
December 31, 1997 3,975,043 4,370,899 167,647 42,063 2,313,811 881,407
Equity in net earnings of The Procter
& Gamble Master Savings Trust 678,481 1,251,229 (8,414) 5,802 111,507 152,995
Distributions and withdrawals
to participants (159,763) (401,114) (7,380) (222,474) (36,460)
Interfund transfers 675,668 (266,442) (535) (10,057) (245,835) (148,462)
---------- ---------- -------- ------- ---------- ----------
Net assets available for benefits,
December 31, 1998 $5,169,429 $4,954,572 $151,318 $37,808 $1,957,009 $ 849,480
========== ========== ======== ======= ========== ==========
<CAPTION>
Managed
Bond
Fund Total
<S> <C> <C>
Net assets available for benefits,
December 31, 1996 $173,497 $10,034,202
Equity in net earnings of The Procter
& Gamble Master Savings Trust 13,884 2,620,532
Distributions and withdrawals
to participants (12,410) (736,117)
Interfund transfers (7,224)
-------- -----------
Net assets available for benefits,
December 31, 1997 167,747 11,918,617
Equity in net earnings of The Procter
& Gamble Master Savings Trust 11,811 2,203,411
Distributions and withdrawals
to participants (7,782) (834,973)
Interfund transfers (4,337)
-------- -----------
Net assets available for benefits,
December 31, 1998 $167,439 $13,287,055
======== ===========
</TABLE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 Procter & Gamble Master Savings Trust (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 February 16, 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:
<TABLE>
Assets of the Master Trust at December 31, 1998 are summarized as follows:
<CAPTION>
INTER-
LARGE SMALL NATIONAL 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 $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 $ 5,169,429 $ 4,954,572 $ 151,318 $ 37,808 $ 1,957,009 $ 849,480 $ 167,439 $ 13,287,055
=========== =========== ========== ========== =========== =========== ========== ============
Plan's percentage
ownership interest
in Master Trust 6% 6% 3% 1% 7% 3% 3% 6%
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
<TABLE>
Investments, at fair value, held by the Master Trust at December 31, 1998 are
summarized as follows:
<CAPTION>
INTER-
LARGE SMALL NATIONAL 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 $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 investments
(overdraft) 438,836 (28,138) (8,899) (6,153) (7,847) (15,090) 2,487 375,196
----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------
Total $82,686,007 $76,750,124 $4,587,218 $2,999,260 $26,401,544 $33,445,663 $6,050,716 $232,920,532
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
<TABLE>
Investment income from the Master Trust for the year ended December 31, 1998 is
summarized as follows:
<CAPTION>
INTER-
LARGE SMALL NATIONAL 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
(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 $ 678,481 $ 1,251,229 $ (8,414) $ 5,802 $ 111,507 $ 152,995 $ 11,811 $ 2,203,411
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
<TABLE>
Assets of the Master Trust at December 31, 1997 are summarized as follows:
<CAPTION>
INTER-
LARGE SMALL NATIONAL 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 $ 4,070,681 $ 4,370,211 $ 167,647 $ 42,063 $ 2,219,440 $ 881,093 $ 167,482 $ 11,918,617
=========== =========== ========== ========== =========== =========== ========== ============
Plan's percentage
ownership interest
in Master Trust 5% 7% 4% 2% 8% 3% 3% 6%
=========== ========== ========== =========== =========== ========== ============ ===========
</TABLE>
<TABLE>
Investments, at fair value, held by the Master Trust at December 31, 1997 are
summarized as follows:
<CAPTION>
INTER-
LARGE SMALL NATIONAL 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 $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>
INTER-
LARGE SMALL NATIONAL 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 $ 1,014,079 $ 1,274,606 $ 33,626 $ 2,304 $ 123,211 158,822 $ 13,884 $ 2,620,532
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
5. DISTRIBUTIONS PAYABLE
Distributions payable to participants at December 31, 1998 and 1997 are
approximately $24,000 and $147,000, 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 Subsidiaries
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
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.
333-14397 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 Company Subsidiaries Savings Plan for the year ended December 31, 1998.
/s/DELOITTE & TOUCHE LLP
Cincinnati, Ohio
June 21, 1999
- ---------------
Deloitte Touche
Tohmatsu
International
- ---------------
