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, 1999, 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: Giorgio Employee 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
GIORGIO EMPLOYEE SAVINGS PLAN
Financial Statements for the Years Ended
December 31, 1999 and 1998 and Supplemental
Schedule as of December 31, 1999
and Independent Auditors' Report
GIORGIO EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of
December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits for
the Years Ended December 31, 1999 and 1998 3
Notes to Financial Statements for the Years Ended December 31,
1999 and 1998 4
SUPPLEMENTAL SCHEDULE - Assets Held for Investment (Schedule H
Part IV Line 4i of Form 5500), December 31, 1999 12
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, 1999
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 Giorgio Employee Savings Plan ("the Plan") as of December 31, 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 auditing standards generally accepted
in the United States of America. 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,
1999 and 1998, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
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
1999 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
------------------------
DELOITTE & TOUCHE LLP
April 26, 2000
<TABLE>
GIORGIO EMPLOYEE SAVINGS PLAN
<CAPTION>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
------------------------------------------------------------------------------------
1999 1998
<S> <C> <C>
ASSETS:
Investments in The Procter and Gamble Master
Savings Trust, at fair value $12,861,058 $11,964,102
Loans to participants 190,604 362,722
Investment income receivable 2,605 4,960
----------- -----------
Total assets 13,054,267 12,331,784
LIABILITIES - Accrued administrative expenses 9,378 -
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $13,044,889 $12,331,784
=========== ===========
See notes to financial statements.
</TABLE>
<TABLE>
GIORGIO EMPLOYEE SAVINGS PLAN
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
1999 1998
<S> <C> <C>
ADDITIONS:
Equity in net earnings of The Procter
& Gamble Master Savings Trust $ 1,980,399 $ 2,106,958
Interest income 24,248 39,278
----------- -----------
Total investment income 2,004,647 2,146,236
Transfer from unaffiliated plans - 78
----------- -----------
Total additions 2,004,647 2,146,314
----------- -----------
DEDUCTIONS:
Distributions and withdrawals to participants 1,247,022 1,821,029
Administrative expenses 44,520 -
----------- -----------
Total deductions 1,291,542 1,821,029
----------- -----------
NET INCREASE 713,105 325,285
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 12,331,784 12,006,499
----------- -----------
End of year $13,044,889 $12,331,784
=========== ===========
See notes to financial statements.
</TABLE>
GIORGIO EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
1. PLAN DESCRIPTION
The following brief description of the Giorgio Employee Savings Plan
("Plan") is provided for general information purposes only. Participants
should refer to the Plan agreement for more complete information.
GENERAL - Effective August 30, 1994, The Procter & Gamble Company ("P&G")
acquired Giorgio Beverly Hills, Inc. ("Company") from Avon Products, Inc.
Prior to the acquisition, certain employees of the Company participated in
the Avon Employees' Savings and Stock Ownership Plan ("Predecessor Plan").
Pursuant to the sales agreement with Avon, assets under the Predecessor
Plan owned by employees of the Company were transferred to create the Plan
on August 30, 1994. Effective January 1, 1997, the Giorgio Pension Plan, a
defined contribution plan, was merged into the Plan.
The Plan assets are held in a combined trust account, The Procter & Gamble
Master Savings Trust ("Master Trust"), with the assets of other P&G
sponsored defined contribution plans (see Note 4). Each of the plans
participating in the Master Trust has a proportionate and undivided
ownership interest in the Master Trust assets. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS AND VESTING - Effective December 31, 1996, both employee and
employer contributions to the Plan were suspended and all participants
became fully vested. Plan participants became eligible to participate in
The Procter & Gamble Profit Sharing Trust and Employee Stock Ownership Plan
effective December 31, 1996.
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 as installment payments. 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
P&G, 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 P&G.
LOANS - The Plan has a loan feature under which active participants may
borrow up to 50% of the current value of their vested account values (up to
a maximum of $50,000). Loans are repayable via payroll deductions over a
period of up to five years, except for loans used to purchase a primary
residence which are repaid via payroll deduction over a period of up to 10
years. Principal and interest paid is credited to applicable funds in the
borrower's account. Upon participant termination or retirement, the
outstanding loan balance is treated as a distribution to the participant.
TRANSFER FROM UNAFFILIATED PLANS - Amounts represent account balances of
Company employees transferred from unaffiliated 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):
ENHANCED CASH FUND (formerly the Reserve Fund) - The prospectus
indicates that this fund invests in short to medium length maturity,
interest-bearing instruments.
COMPANY STOCK FUND - A fund investing in shares of P&G common stock.
ACTIVE FIXED-INCOME CORE FUND (FORMERLY THE 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.
DISCIPLINED EQUITY FUND (FORMERLY THE LARGE BOND 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 EQUITY II FUND (FORMERLY THE SMALL COMPANY FUND) - The
prospectus indicates that this fund invests in a portfolio of equity
securities issued by small companies.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements are prepared
under the accrual basis of accounting and the Plan's net assets and
transactions are recorded at fair value. The Plan's investment in P&G
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 participating plan in the Master Trust
by PNC Bank and to each participant's account by the Plan's recordkeeper.
EXPENSES OF THE PLAN - Investment management expenses are paid by the Plan
in 1999. All other fees are paid by P&G. P&G paid all Plan expenses in
1998.
USE OF ESTIMATES - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America 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.
RECLASSIFICATIONS - The Plan has adopted Statement of Position 99-3
"Accounting and Reporting of Certain Employee Benefit Plan Investments and
Other Disclosure Matters." As a result, the financial statements have been
revised to eliminate the by-fund disclosures.
3. TAX STATUS
The Internal Revenue Service (IRS) has determined and informed the Company
by letter dated March 22, 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. 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, 1999 and 1998. Therefore, the Plan
Administrator believes that the Plan was qualified and tax-exempt as of
December 31, 1999 and 1998 and no provision for income taxes has been
reflected in the accompanying financial statements.
4. INTEREST IN MASTER TRUST
Effective January 1, 1993, P&G 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 P&G-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 1999 and 1998 audited financial
information regarding the net assets and investment income of the Master
Trust:
<TABLE>
Assets of the Master Trust at December 31, 1999 are summarized as follows:
<CAPTION>
ACTIVE
SMALL INTER- FIXED-
DISCIPLINED COMPANY NATIONAL ENHANCED INCOME
COMPANY EQUITY EQUITY II EQUITY CASH DIVERSIFIED CORE
STOCK FUND FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair
value $95,073,504 $90,403,642 $5,939,202 $3,536,914 $25,264,139 $36,357,122 $5,556,031 $262,130,554
Accrued interest and
dividends 4,143 171 57 34 164 68 27 4,664
----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------
Total $95,077,647 $90,403,813 $5,939,259 $3,536,948 $25,264,303 $36,357,190 $5,556,058 $262,135,218
=========== =========== ========== ========== =========== =========== ========== ============
Plan's investment in
Master Trust $ 3,895,274 $ 4,689,511 $ 328,556 $ 273,352 $ 378,124 $ 2,486,928 $ 809,313 $ 12,861,058
=========== =========== ========== ========== =========== =========== ========== ============
Plan's percentage
ownership interest
in Master Trust 4% 5% 6% 8% 1% 7% 15% 5%
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
<TABLE>
Investments, at fair value, held by the Master Trust at December 31, 1999 are
summarized as follows:
<CAPTION>
ACTIVE
SMALL INTER- FIXED-
DISCIPLINED COMPANY NATIONAL ENHANCED INCOME
COMPANY EQUITY EQUITY II EQUITY CASH DIVERSIFIED CORE
STOCK FUND FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Procter & Gamble
Company common stock $94,131,490 $ 94,131,490
Mutual funds $90,403,642 $5,939,202 $3,536,914 $25,264,139 $36,357,122 $5,556,031 167,057,050
Short-term investments 942,014 942,014
----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------
Total $95,073,504 $90,403,642 $5,939,202 $3,536,914 $25,264,139 $36,357,122 $5,556,031 $262,130,554
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
<TABLE>
Investment income from the Master Trust for the year ended December 31, 1999 is
summarized as follows:
<CAPTION>
ACTIVE
SMALL INTER- FIXED-
DISCIPLINED COMPANY NATIONAL ENHANCED INCOME
COMPANY EQUITY EQUITY II EQUITY CASH DIVERSIFIED CORE
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 $15,627,185 $15,265,177 $1,690,909 $ 901,360 $ 1,416,290 $ 4,261,467 $ 9,284 $ 39,171,672
Dividends 1,058,186 1,058,186
Interest 31,081 1,752 265 246 503 516 189 34,552
----------- ----------- ---------- ---------- ----------- ----------- ---------- ------------
Total $16,716,452 $15,266,929 $1,691,174 $ 901,606 $ 1,416,793 $ 4,261,983 $ 9,473 $ 40,264,410
=========== =========== ========== ========== =========== =========== ========== ============
Plan's equity in
net earnings of
Master Trust $ 696,854 $ 783,283 $ 105,247 $ 72,810 $ 22,366 $ 298,524 $ 1,315 $ 1,980,399
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
<TABLE>
Assets of the Master Trust at December 31, 1998 are summarized as follows:
<CAPTION>
ACTIVE
SMALL INTER- FIXED-
DISCIPLINED COMPANY NATIONAL ENHANCED INCOME
COMPANY EQUITY EQUITY II EQUITY CASH DIVERSIFIED CORE
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 $ 3,623,825 $ 4,164,775 $ 220,553 $ 270,291 $ 434,734 $ 2,324,845 $ 925,079 $ 11,964,102
=========== =========== ========== ========== =========== =========== ========== ============
Plan's percentage
ownership interest
in Master Trust 4% 5% 5% 9% 2% 7% 15% 5%
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
<TABLE>
Investments, at fair value, held by the Master Trust at December 31, 1998 are
summarized as follows:
<CAPTION>
ACTIVE
SMALL INTER- FIXED-
DISCIPLINED COMPANY NATIONAL ENHANCED INCOME
COMPANY EQUITY EQUITY II EQUITY CASH DIVERSIFIED CORE
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>
ACTIVE
SMALL INTER- FIXED-
DISCIPLINED COMPANY NATIONAL ENHANCED INCOME
COMPANY EQUITY EQUITY II EQUITY CASH DIVERSIFIED CORE
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 (losses)
of Master Trust $ 466,764 $ 1,097,807 $ (10,439) $ 42,422 $ 28,241 $ 414,392 $ 67,771 $ 2,106,958
=========== =========== ========== ========== =========== =========== ========== ============
</TABLE>
5. DISTRIBUTIONS
Distributions payable to participants at December 31, 1999 and 1998 are
approximately $103,000 and $12,000, respectively.
* * * * * *
<TABLE>
GIORGIO EMPLOYEE SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT
(SCHEDULE H PARTY IV LINE 4i OF FORM 5500)
DECEMBER 31, 1999
------------------------------------------------------------------------------------------------------
<CAPTION>
IDENTITY OF ISSUE,
BORROWER, LESSOR FAIR
OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE
<S> <C> <C> <C>
Participant Loans 29 loans with maturities ranging from May 2000
to March 2008 and interest rates ranging from $ - $190,604
8.75-10% ====== ========
</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.
Giorgio Employee Savings Plan
/s/THOMAS J. MESS
Date: June 22, 2000 ---------------------------------------
Thomas J. Mess
Secretary for Trustees
EXHIBIT INDEX
Exhibit No. Page No.
23 Consent of Deloitte & Touche
