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 and
Investment 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 AND INVESTMENT PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997 AND SUPPLEMENTAL
SCHEDULE AS OF DECEMBER 31, 1998 AND
INDEPENDENT AUDITORS' REPORT
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS AND
INVESTMENT 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 for the Years Ended December 31,
1998 and 1997 4
SUPPLEMENTAL SCHEDULE - Assets Held for Investment
(Item 27a of Form 5500), December 31, 1998 11
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 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 and Investment 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.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
Table of Contents is presented for the purpose of additional analysis and is not
a required part of the basic financial statements, but is 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. The schedule is the responsibility of the Plan's management. Such schedule
has been subjected to the auditing procedures applied in our audit of the basic
1998 financial statements, and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/S/DELOITTE & TOUCHE LLP
April 30, 1999
<TABLE>
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS
AND INVESTMENT 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 $6,223,851 $5,643,754
Loans to participants 67,941 81,481
---------- ----------
Total investments 6,291,792 5,725,235
INVESTMENT INCOME RECEIVABLE 1,038 1,215
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $6,292,830 $5,726,450
========== ==========
See notes to financial statements.
</TABLE>
<TABLE>
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS
AND INVESTMENT 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 $1,074,325 $ 997,932
Interest 7,035 10,957
---------- ----------
Total investment income 1,081,360 1,008,889
---------- ----------
Transfer from unaffiliated plans - 19,948
---------- ----------
Other - 447
---------- ----------
Total additions 1,081,360 1,029,284
DEDUCTIONS - Distributions and withdrawals
to participants 514,980 281,702
---------- ----------
NET INCREASE 566,380 747,582
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 5,726,450 4,978,868
---------- ----------
End of year $6,292,830 $5,726,450
========== ==========
See notes to financial statements.
</TABLE>
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS
AND INVESTMENT 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 and Investment Plan (the "Plan") is provided for general
information purposes only. Participants should refer to the Plan agreement
for more complete information.
GENERAL - The Plan is a defined contribution plan covering substantially
all employees of Maryland Club Foods, Inc., all eligible employees of
Shulton, Inc., and former employees of Fisher Nut Company who were members
of the Twin Cities Bakery and Confectionery Workers Union, Local No. 22.
Maryland Club Foods, Inc. was sold in May 1994 and Fisher Nut Company was
dissolved in July 1998. The Plan was established effective April 1, 1989
and is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA). Effective March 14, 1996, the Shulton Savings Plan and
Fisher Nut Savings Plan were merged into the Maryland Club Foods, Inc.
Retirement Savings Plan and The Procter & Gamble Company ("Company"), plan
sponsor, changed the Plan name to The Procter & Gamble Subsidiaries Savings
and Investment Plan.
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 120
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.
TRANSFER FROM UNAFFILIATED PLANS - Amounts represent account balances of
Company employees transferred from unaffiliated Company plans.
LOANS - The Plan allows participants to borrow funds from their accounts in
certain circumstances up to maximum amounts specified in the Plan
agreement. Loans are repayable in at least monthly installments of
principal and interest over a maximum term of five years (fifteen years if
the loan is used to purchase a primary residence). Principal and interest
paid is credited to applicable funds in the borrower's account. Upon
termination or retirement, the outstanding loan balance will be treated as
a distribution to the participant.
PARTICIPANT ACCOUNTS AND INVESTMENT OPTIONS - Each participant account is
credited with an allocation of Plan earnings. The benefit to which a
participant is entitled is the vested benefit that can be provided from the
participant's account. Participants may allocate their accounts 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.
INTERNATIONAL EQUITY FUND - The prospectus indicates that this fund
invests in a diversified portfolio of equity securities of foreign
corporations.
SMALL COMPANY FUND - The prospectus indicates 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 for the years
ended December 31, 1998 and 1997:
<CAPTION>
Large International Small Company
Company Reserve Diversified Equity Company Stock
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Net assets available for benefits,
December 31, 1996 $2,193,765 $2,010,119 $385,133 $26,717 $ 43,458 $123,043
Equity in net earnings of The Procter
& Gamble Master Savings Trust 653,467 91,887 64,331 782 21,016 155,801
Interest
Transfer from unaffiliated plans 8,777 11,171
Other
Distributions and withdrawals
to participants (178,743) (69,655) (33,304)
Interfund transfers (82,754) (222,011) (2,852) 45,019 271,079
---------- ---------- -------- ------- -------- --------
Net assets available for benefits,
December 31, 1997 2,594,512 1,821,511 413,308 27,499 109,493 549,923
Equity in net earnings of The Procter
& Gamble Master Savings Trust 801,960 85,950 85,103 4,127 (6,207) 94,120
Interest
Distributions and withdrawals
to participants (172,793) (295,684) (13,849) (6,365) (902) (8,384)
Interfund transfers
48,080 (189,229) 75,711 2,161 82,174
---------- ---------- -------- ------- -------- --------
Net assets available for benefits,
December 31, 1998 $3,271,759 $1,422,548 $560,273 $25,261 $104,545 $717,833
========== ========== ======== ======= ======== ========
<CAPTION>
Managed
Bond Loan
Fund Fund Total
<S> <C> <C> <C>
Net assets available for benefits,
December 31, 1996 $112,117 $84,516 $4,978,868
Equity in net earnings of The Procter
& Gamble Master Savings Trust 10,648 997,932
Interest 10,957 10,957
Transfer from unaffiliated plans 19,948
Other 447 447
Distributions and withdrawals
to participants (281,702)
Interfund transfers 7,325 (15,806)
-------- ------- ----------
Net assets available for benefits,
December 31, 1997 130,090 80,114 5,726,450
Equity in net earnings of The Procter
& Gamble Master Savings Trust 9,272 1,074,325
Interest 7,035 7,035
Distributions and withdrawals
to participants (17,003) (514,980)
Interfund transfers
1,706 (20,603)
-------- ------- ----------
Net assets available for benefits,
December 31, 1998 $124,065 $66,546 $6,292,830
======== ======= ==========
</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, 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 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. INCOME TAX STATUS
The Internal Revenue Service (IRS) has determined and informed the Company
by letter dated March 11, 1991, 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. However, the plan administrator believes that the Plan is designed
and is currently being operated in compliance with the applicable
provisions of the IRC at 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 various investments that
fund 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 $ 717,430 $ 3,270,455 $ 104,481 $ 25,261 $ 1,422,817 $ 559,590 $ 123,817 $ 6,223,851
=========== =========== ========== ========== =========== =========== ========== ============
Plan's percentage
ownership interest
in Master Trust 1% 4% 2% 1% 5% 2% 2% 3%
=========== =========== ========== ========== =========== =========== ========== ============
</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 $ 94,120 $ 801,960 $ (6,207) $ 4,127 $ 85,950 $ 85,103 $ 9,272 $ 1,074,325
=========== =========== ========== ========== =========== =========== ========== ============
</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 $ 549,163 $ 2,594,297 $ 109,418 $ 27,499 $ 1,812,741 $ 420,797 $ 129,839 $ 5,643,754
=========== =========== ========== ========== =========== =========== ========== ============
Plan's percentage
ownership interest
in Master Trust 1% 4% 2% 1% 6% 1% 2% 3%
=========== ========== ========== ========== =========== =========== ========== ============
</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 $ 155,801 $ 653,467 $ 21,016 $ 782 $ 91,887 $ 64,331 $ 10,648 $ 997,932
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
5. DISTRIBUTIONS
Distributions payable to participants at December 31, 1998 and 1997 are
approximately $23,000 and $150,000, respectively.
* * * * * *
<TABLE>
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS AND
INVESTMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT (ITEM 27a of Form 5500)
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<CAPTION>
IDENTITY OF ISSUE,
BORROWER, LESSOR FAIR
OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE
<S> <C> <C> <C>
Participant Loans 9 loans with maturities ranging from July 1999
to November 2009 and interest rates ranging from
7.75-10% $ - $67,941
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 TRANSITION REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED
HEREUNTO DULY AUTHORIZED.
Procter & Gamble Subsidiaries Savings
and Investment Plan
Date: June 22, 1999 /s/THOMAS J. MESS
--------------------------------------
Thomas J. Mess
Secretary for Trustees
EXHIBIT INDEX
Exhibit No. Page No.
23 Consent of Deloitte & Touche
</TABLE>
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.
333-14395 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 and Investment Plan for the year ended
December 31, 1998.
/s/DELOITTE & TOUCHE LLP
Cincinnati, Ohio
June 21, 1999
- ----------------
Deloitte Touche
Tohmatsu
International
- ----------------
